Citing "disappointing financial results" during his tenure, Robert Stauth has resigned as Fleming Cos.' chairman and chief executive under pressure from the board of directors.
Flagging stock performance and millions in litigation expenses have punctuated Stauth's tenure, which began in 1993. The nation's second largest food distributor, Fleming recently lost its top customers -- Randall's Foods and Furr's Supermarkets -- in settlements related to Fleming's alleged overcharges. That bailout will cost Fleming about $1 billion.
But Fleming spokesperson Andy Oden said "there was no particular reason" for Stauth's departure, which the seven-member board of directors voted on last weekend in Chicago.
"The company's performance has languished, and the board felt like it was a time for a change in leadership," he said. Oden added it was "premature" to predict any more changes in Fleming's top management.
The Oklahoma City-based food distribution company announced Monday that Stauth's resignation was effective immediately. Fleming Director Edward C. Joullian will serve as interim chair.
Fleming President and Chief Operating Officer William J. Dowd is a candidate for the position, according to Oden. However, the board and outside consultants will begin a nationwide search for Stauth's replacement.
At his Oklahoma City home Monday, Stauth said his resignation was "an amicable deal," but conceded to unsatisfactory results for the company during his time as chair and chief executive.
"I've been doing this for five years and haven't been able to move the stock," Stauth said. "We've all been disappointed in the financial results. There have been a lot of external things come at us. You know the story there."
Even so, Stauth said the Randall's and Furr's settlements had "absolutely nothing whatsoever" to do with his move.
Besides the Randall's and Furr's disputes, Fleming has defended several shareholder derivative suits and class actions related to the company's disclosure to shareholders concerning litigation in Texas. In 1995, Grandview, Texas-based David's Supermarkets sued Fleming for alleged overcharges involving its supply agreement. Shareholders contended that Fleming failed to notify them of the David's Supermarkets litigation, which negatively affected stock performance.
Though some of those actions have been dismissed, Fleming paid $19 million to settle the underlying case last year. In addition, Fleming handed over some $20 million in 1996 to Premium Sales to settle a case involving a failed grocery diverter's fraudulent investment scheme.
Since 1995, Fleming's net earnings have slumped from $42 million to $26.7 million in 1996 and $25.4 million, or 67 cents per share, in 1997.
Sales for the company dropped from $16.5 billion in 1996 to $15.4 billion last year.
Fleming's stock closed Monday up 5/8 to 17 1/4 on the New York Stock Exchange.
Fleming has held much hope in its so-called re-engineering program launched in 1995 and designed to move the company beyond distribution and into retail marketing services. Those services include advertising, financing, insurance, …