Heelys Jettisons CEO After Eight Months

Heely’s HLYS (NASDAQ) the wheeled sneaker manufacturer that has been reeling since its fad faded has been forced to get rid of its CEO again.  Back in May 2008 the company was reeling and replaced its CEO Michael Staffaroni with Don Carroll.  Carroll had been with the firm for a short time as its SVP of Marketing.  At the time of the appointment, I was skeptical Carroll would succeed in turning the company around (see earlier blog).  Now Heely’s finds itself in an even more difficult place.  According to an article by Sheryl Jean of the Dallas News,

The Carrollton-based company that makes sneakers with built-in wheels for kids said Tuesday that Carroll’s resignation is effective immediately. Carroll, who became CEO on May 20, 2008, had been trying to turn the company around and broaden its product line. 

Heelys named Michael W. Hessong interim CEO until a replacement is found. He was the company’s chief financial officer for eight years until he left last May.

 Heelys has been looking to find a savior for some time.  The company rejected a buyout offer from footwear company Skeechers USA last summer.  Since then Heelys appears to have been looking to no avail for another buyout opportunity.  The company’s options are only getting smaller.  The choice of a former CFO as the company’s interim chief executive only points to the firm’s belief that some kind of buyout is their best option. Stay tuned.  

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Update: Heely's New CEO Takes Helm

Heelys HLYS (NASDAQ), the wheeled sneaker manufacturer who hit a wall after its fad began to waiver, has put in place a new CEO, Don Carroll.  Back in February, Heelys' CEO Michael Staffaroni resigned (see earlier blog) as the company's fortunes continued to sink.  Upon Staffaroni's resignation the company appointed Ralph T. Parks, who at the time had been recently appointed to the company's board.  Parks will remain a member of the board now that Carroll is the new CEO.  

Carroll originally joined Heelys back in early January when he was appointed SVP of Marketing.  While Carroll appears to have over twenty years of consumer product experience, at first glance he does not bring anything extraordinary to the table.  For the last two years he was a managing director at Vector2group, a professional services company intended to drive operational improvements in companies.  Prior to Vector2group he worked for Radio Shack for eight years.  His last position at the company he was the SVP Marketing and Brand Officer. While all these positions were useful, what do they offer for a company reeling from falling sales and need for a major strategic re-focus?  According to a piece in the Advertiser, Carroll is quoted,

... he's got big brand-revival plans. Within five years, its wheeled shoes that generate 100 percent of sales will account for just 30 percent to 35 percent, he projects.

While the company and Carroll have product plans he has a tough task ahead.

Stay tuned.

For more:

Dallas Business Journal

Footwear News

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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