Dive Brief:
- Two CFO hires this week show companies are relying on new finance executives to help them overcome obstacles and reinvent themselves.
- Lumber Liquidators Holdings, Inc., the largest hardwood flooring retailer in the United States, announced on Monday it was bringing in former Pier 1 finance chief Nancy Walsh to take over as CFO in early September.
- Citrix Systems, a software firm specializing in giving remote-access to company workspace platforms, announced on Monday it is bringing Arlen Shenkman on board as CFO. Shenkman is a top global executive of German software giant SAP and a past CFO of SAP’s North American division.
Dive Insight:
In March, Lumber Liquidators agreed to pay a $33 million federal fine for lying to investors about environmental compliance of the Chinese-made laminate flooring it sells, CBS News reported. Six months earlier, it settled a class-action lawsuit over the flooring for $36 million.
Burdened by these legal issues, the company risked falling behind competitors and missing changes to the retail space in which they operate, Brian Nagel, an analyst at Oppenheimer & Co., said in a Wall Street Journal report.
Nagel said Walsh brings the background the company needs to help it rebuild trust. “Lumber Liquidators has been able to find a CFO that has experience at other public companies,” he told the Journal. “That’s a good sign.”
“The board and I are excited to add someone with Nancy’s broad retail and finance experience to the executive team at Lumber Liquidators,” CEO Dennis Knowles said in a statement. “Her wealth of knowledge will assist us as we execute our transformation plan to position the company for long term success.”
Meanwhile Shenkman, who helped SAP retool itself to compete in cloud computing, faces the daunting task of making Citrix a top competitor at a time when companies have many options for building remote-access platforms, analysts told The Wall Street Journal. The company is facing competition from some of the biggest digital companies in the world — Amazon, Microsoft and Google — as they move into the cloud-based workspace business.
“He led part of the cloud transition at SAP, and should be well-positioned to lead the transformation at Citrix,” Dan Romanoff, an analyst at Morningstar Inc., said in the Journal article.
“His success in driving accelerated growth through a shift to a subscription-based model, and in accelerating business outcomes through M&A, greatly bolsters our seasoned leadership team,” David Henshall, Citrix’s president and chief executive, said in a statement.
Although the company has been transitioning to more cloud-based services and increasing its revenue from subscriptions, it continues to struggle. Its net income in the second quarter fell to $93.5 million from $106.8 million in the year-earlier period, the Journal reported.
One of Shenkman's main responsibilities will be steering the company toward new revenue streams, while also keeping an eye on profitability, Daniel Ives, a managing director at Wedbush Securities Inc., told the Journal. “Ultimately, this is a company that has growth challenges,” he said.
Both CFOs start their new jobs on September 9. The hires show high expectations that these CFOs will help breathe new life into companies facing make-or-break challenges.
