Hanover replaces ceo Kaul with Shull
December 11, 2000,
WEEHAWKEN, NJ -After several turbulent years in which Rakesh Kaul tried to turn around the troubled U.S. catalog and Internet company Hanover Direct, he was ousted last week as president and ceo.
After the announcement, Hanover Direct's stock was at 25 cents a share, down 92.3 percent from a 52-week high of $3.69.
Kaul joined Hanover Direct in early 1996 and proceeded to institute his turnaround effort by putting the catalogs on the Internet, and later set up a separate division to provide Internet services to other fledgling e-tailers. But the high startup costs of Internet ventures along with the high failure rate of Internet sites proved to be too much for the deep pockets of Hanover Direct's parent company, the European-based Richemont, which also owns luxury goods companies like Cartier Jewelry and Mont Blanc pens.
Hanover Direct recently reported losses of $15.9 million for the 13 weeks ended Sept. 23, down from a $2.8 million loss the year before. For the first nine months of 2000, ended Sept. 23, the company reported losses of $43.17 million, down from a loss of $13.18 million the year before.
Ironically, the retail division had increased sales for the year. For 13 weeks ended Sept. 23, sales for the direct commerce division totaled $133.6 million, up from $119.9 million the previous year, and pre-tax income was $2.6 million, up from $2.2 million the year before.
Business-to-business services posted sales of $6.8 million, up from $1.7 million the previous year, and a pre-tax loss of $12.9 million, down from a $4.7 million loss the previous year, for the 13 weeks ended Sept. 23.
For the nine months ended Sept. 23, the retail division has sales of $393.5 million, up from $377.1 the previous year, and pre-tax incomes of $3.2 million, down from $3.7 million the previous year.
During the same period, the business-to-business division had sales of $20.4 million, up from $3.5 million the year before, and a pre-tax loss of $33.2 million for this period, compared to a $15.9 million loss last year.
A press release stated that Shull will be responsible for day-to-day operations of the company including business development, strategic planning as well as identifying and enhancing the company's operational "best practices."
With a strong retail and operational background, Shull was involved with the turnaround of Barneys as well as Macy's recovery from bankruptcy and merger with Federated Department Stores. He has also held senior management positions at a number of companies including idealab, Federated Department Stores, and Merry-Go-Round Enterprises.
"Hanover's brands are category leaders and the company is a well-known fulfillment and e-commerce services provider," Shull said in the release. "I look forward to working with the board and management team to leverage the strength of our brands and build on the company's core competencies."
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