Dive Brief:
- Joann President and CEO Wade Miquelon retired Monday, according to a company press release.
- Chief Customer Officer Chris DiTullio and Chief Financial Officer Scott Sekella will lead the interim Office of the Chief Executive Officer.
- Joann’s board has begun a search to identify a permanent replacement.
Dive Insight:
After seven years with the company, Miquelon has exited the chief executive role.
Miquelon started at Joann in 2016 as CFO, and was appointed interim CEO in 2018. He took the top position in February 2019.
His retirement comes after what Miquelon called a “challenging” fiscal 2023. In the company’s most recent earnings report, full-year net sales declined by 8.3% to $2.2 billion, comp sales declined 8.1% and the company reported a net loss of $201 million, compared to a net income of $56.7 million the year prior.
Although a CEO change “seemed inevitable,” it “adds a layer of uncertainty” to the company, according to a Wells Fargo analyst note regarding Miqeulon’s retirement
While a search for a replacement is underway, “we see benefits to a quick resolution,” the analysts, led by David Lantz, wrote, pointing to declining comps, margins and category demand, liquidity concerns and a post-IPO underperformance.
“On behalf of the Board, I’d like to thank Wade for leading Joann through its initial public offering and the difficult challenges the COVID-19 pandemic presented,” Brian Coleman, vice president at Leonard Green Partners, said in a statement. “As we look to the next chapter for Joann, we remain focused on delivering value for our shareholders through strategic priorities centered on creating a great in-store and online experience for our customers, driving operational efficiencies, and capitalizing on Joann’s strength in the sewing, arts and crafts categories.”
The retailer saw a surge in sales during the height of COVID-19 while people worked on projects at home. An easing of pandemic restrictions and an increase in inflation, which led to a pullback on discretionary spending, impacted the retailer.
In March, the company entered into a $100 million first-in last-out facility to provide additional liquidity and optimize the company’s balance sheet. The company also announced a $200 million annual cost reduction plan — a goal it expects to realize by fiscal year 2025.
“Freight and inflationary challenges remain, visibility is low, and the category is highly promotional / discretionary,” Wells Fargo analysts said. Miquelon’s retirement therefore is concerning “to an already deeply challenged business.”
Joann was placed on Retail Dive’s bankruptcy watchlist last fall.
