Buchanan’s hiring, effective Jan. 6, means a quick exit for current CEO Mark Cosby, who will depart April 1, after a transition period. Cosby was named interim CEO in February and the interim tag was removed in October.
The Irving, Texas, company has struggled over the past two years amid stiff online competition, uncertainty about its long-term strategy, management changes and confusing pricing strategy.
Michaels reported a drop in comparable-store sales in the third quarter. And even after Friday’s jump, its stock has lost two-thirds of its value in the past two years.
At last check the shares were up 44% at $8.68.
The management turmoil hasn’t ended. The announcement of Buchanan’s hiring included the news that Michaels CFO Denise Paulonis was leaving for another company Jan. 31. Michaels didn’t say which company Paulonis was joining.
Paulonis was named executive vice president and CFO in August 2016. She earlier served as senior vice president of finance. And she’d joined Michaels in September 2014 as vice president of investor relations, treasury and corporate finance.
Buchanan was seen as a rising star at Walmart. With his digital experience, he plugs a hole for Michaels, Stephens analyst Rick Nelson wrote in a report obtained by Bloomberg.
“The arts/crafts industry appears to be in the early stages of shakeout, with consumer creativity increasingly swinging to social media and competitors beginning to close stores,” he said.
“We see MIK as an eventual winner, with a dominant market position, brand awareness, and strong balance sheet. In the interim, however, store closings, liquidation sales, and new strategies are likely to produce choppy results.”
In late November the family-owned arts-and-crafts chain A.C. Moore said it would close operations after 30 years, saying "the headwinds facing many retailers in today's environment, it made it very difficult for us to operate and compete on a national level."
The author owns shares of Walmart.