Barnes & Noble is looking for its fifth CEO since 2010, angering investors
New York — Barnes & Noble is starting a search for its fifth CEO since 2010 following Demos Parneros’s sudden termination, irking investors looking for a steady comeback strategy in the age of Amazon.
The embattled book seller fired Parneros after only about 14 months on the job, citing a violation of company policies, according to a statement on Tuesday. It declined to specify further other than to say it wasn’t "due to any disagreement with the company regarding its financial reporting, policies or practices or any potential fraud."
"This news certainly reads like it is related to personal conduct. But there is a story here about consistency of leadership," Consumer Edge Research analyst David Schick said in a July 4 note. Given the pressures on the business, including Amazon’s continued encroachment, the company "needs consistency at the helm".
Shares fell as much as 3.3% in Thursday trading in New York. They were already down 10% this year at Tuesday’s close.
For years, Barnes & Noble has fought an uphill battle as shoppers flocked to online outlets — especially Amazon, which got its start specialising as an online book seller. Its chain of bricks-and-mortar stores was plagued by sluggish sales and the slow adoption of its Nook e-reader. Still, Parneros had been plotting a turnaround, including a push to revamp the chain’s toy and gift business as the world’s biggest toy chain, Toys R Us, closes its doors.
While the book seller searches for a new CEO, it’s appointed a leadership group to share executive duties until a new chief is named.
"This is another setback for a company that has had four CEOs in five years," said Liz Dunn, CEO of Pro4ma and operating partner at the retail advisory Consumer Growth Partners. "Financial performance has continued to deteriorate but Parneros had hired key talent and was rolling out several strategic initiatives. The announcement puts these initiatives at risk."
While the reasoning for his departure is unknown, the company’s move to withhold severance could indicate a violation of conduct policies, she said. "In today’s climate, executive behaviour is under more scrutiny," Dunn said.
Parneros did not reply to a request for comment. The company declined to comment beyond the statement.