Management Turnover as Change Agent

Monday, February 4, 2008

Heelys, The Wheeled-Sneaker Maker, CEO Resigns

Friday, February 1, Heelys Inc. HLYS (NASDAQ) CEO, Michael G. Staffaroni resigned from the company. While the company looks for a permanent CEO, Ralph T. Parks who was named to the company's board earlier in the week, was appointed interim CEO. Parks, a former president and CEO of FootAction USA has had extensive years of experience in the footwear industry.

Heelys, which for a while went through a story book rise, has now come down to earth and has been suffering from declining sales, growing inventories and a weak stock price. Dallas Magazine ran a story in November 2007 that examined Staffaroni's plans to get the shoemaker back on top and also presented the unique story of how this company evolved so quickly and went public in 2006 . In the story Jay Johnson wrote,
... one sign of this uncertainty was Heelys’ precipitous stock decline Aug. 8, when it lost nearly 50 percent of its value in a single day, falling from $21.99 to $11.42 per share. And until everyone can figure out exactly which box to put Heelys into, the Carrollton company’s stock will likely continue to experience as many ups and downs as a kid at a skatepark.
The company has continued to experience problems since the dramatic drop in its stock back in August. Controversy continues to face the company. Many analysts view the firm's main product as a fad and see little hope for long term revival of the firm, while others see potential for a revival if the company manages to finds an appropriate corporate strategy.

Heely's really needs to find a special CEO who would be capable of turning the firm around. It appears to be a tall task. Stay tuned and keep a close eye on Parks and who the company selects to be its permanent CEO.

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