Franks CEO Resigns
In a surprising announcement made on Wednesday of last week, Bruce Dale has decided to resign as CEO of Franks Nursery, after nine months at the position, due to rising concerns that the Franks turnaround plan is failing according to the Detroit News.
Dale is the company’s third chief executive in three years. He also stepped down from his position on the board of directors. As of press time, no one has been hired to take over the position.
According to the Detroit News, Franks increased its revolving credit line by $25 million to $45 million and hired a management consulting firm to help the company regain its cash flow. The company emerged from Chapter 11 in May 2002. Franks had to close 87 of its stores and now operates 170 in states from its original number of 257 stores in 15 states.
As far as earnings go, the company lost $10.5 million during the first three quarters of its fiscal year because of the tough competition they are currently facing with stores like Lowe’s and Home Depot as well as the number of independent retailers in the country.
Within the last several weeks, Franks had been making the transition from being a nursery and craft chain to a garden specialty store, taking away all of the crafts and focusing on live and silk plants, gifts and outdoor furniture, and revamped some stores. Analysts saw Dale as major in the repositioning plan according to the Detroit News. However, the company is saying that Franks is still going forth with its growth plan in anticipation for the upcoming spring season. But according to the Detroit news, many people in the industry are very wary as to the fate of Franks.
New product lines in the lawn and garden category are planned to be introduced at Franks. The company also announced on Wednesday that it has a new credit agreement and they have hired Abacus Advisors LLC to help in the operation turnaround.