CEO Resigns: What's next for BJ's? (Taken from RetailwireNews)
BJ's Wholesale Club has been the subject of takeover rumors for some time now and the speculation surrounding the company has only increased with last week's sudden resignation of Mike Wedge, the company's president and CEO.
A company release issued by Mr. Wedge and Herb Zarkin, chairman of the board for BJ's, said, "While the company has made great strides in its efforts to improve general merchandise sales and customer traffic, overall progress has not come as quickly as we had hoped and expected."
Bear Stearns analyst Christine Augustine expressed some surprise over the timing of the announcement given that the holiday sales season has just begun.
Another analyst, Neil Currie of UBS, said Mr. Wedge's departure "may increase the speculation of BJ's as a potential takeover prospect" and that "past comments from Mr. Wedge indicated that he would not welcome such an approach."
BJ's was quick to dismiss rumors of a takeover by private equity firm or another retailer. Company spokesperson Amy Russ, told The Associated Press, Mr. Wedge's resignation was "not a signal to the market that the company is for sale."
Despite some weaknesses, BJ's is seen as an attractive acquisition target because it has a solid cash flow and balance sheet.
Discussion Questions: What does BJ's Wholesale Club need to do if it is to successfully address its customer traffic and general merchandise sales issues? Would the company be well advised to pursue strategic alternatives including a possible sale?
- BJ's CEO resigns amid sales disappointment - Reuters
- BJ's Wholesale CEO Resigns - The Associated Press/CBS News
- Mike Wedge To Retire From BJ's Wholesale Club - BJ's Wholesale Club