Michaels Companies Inc.
The announcement of Michaels' change in leadership came last Friday and was responsible for a sizable leap in Michaels' stock price, 33.7%, by the end of trading. Buchanan will become CEO effective on January 6, current CEO Mark Cosby will step down from his post entirely after a transitional period lasting into April but will remain on the Board of Directors. Cosby's dismissal comes after only two months at his post, Buchanan is the third CEO named by the company in three months.
Buchanan was previously an executive for Walmart, serving as the chief officer of marketing and eCommerce. Before Walmart Buchanan worked for several tech companies, Buchanan's experience could bode well for Michaels, which, like many retailers, is struggling with the gradual move to online shopping by American consumers. Michaels currently has ambitions to increase its online presence, something that Buchanan's experience could help the company achieve.
The jump in stock showed high confidence in the new CEO by investors, with Michaels itself referring to Buchanan as a "world-class executive," showing their faith in the soon-to-be CEO well before he assumes his post. Michaels has reason to be excited at the prospect of a seasoned executive, given the company's lagging performance under previous leadership. Over the last three quarters, Michaels has posted continual losses; its November revenue was down $1.27 Billion from last year. Before the spike in sales from the announcement of Buchanan's posting, Michaels was victim to a 15% drop in share price after reporting a sizable drop in sales at its brick-and-mortar locations. Before this, Michaels closed down all of its Aaron Brothers stores, a definitive sign that the company is experiencing substantial financial trouble.
Buchanan has quite a lot ahead of him as he inches close to assuming his post, though given his experience and track record his tenure may prove to be the reversal in fortune Michaels needs. An increased online presence and a new vision moving forward could be all the company needs to rebound from a dismal year.
- https://www.marketwatch.com/story/walmart-e-commerce-executive-takes-the-top-spot-at-michaels-2019-12-27
- https://www.cnn.com/2019/12/27/business/michaels-ceo-ashley-buchanan/index.html
- https://www.fool.com/investing/2019/12/27/why-michaels-stock-jumped-23-on-friday.aspx
- https://nypost.com/2019/12/27/michaels-picks-walmart-exec-ashley-buchanan-as-new-ceo/
