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
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
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
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
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
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, store development, inventory
management and more. …