OfficeMax Tanks on New CEO Appointment

OfficeMax names a new CEO, sending shares tumbling.
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NEW YORK (

TheStreet

) --

OfficeMax

(OMX)

is tumbling following its appointment of Ravi Saligram as chief executive officer.

Saligram replaces Sam Duncan, who announced his retirement earlier this year, effective Nov. 8. Saligram comes from uniform retailer Aramark, where he was president.

The company also announced that Rakesh Gangwal has been named non-executive chairman of the board, effective Nov. 8.

While investors appear critical of this new appointment, sending shares down 4.3% to $15.34 on Thursday morning, Janney Capital Markets analyst David Strasser believes this was a good move.

"Ravi Saligram is an outsider to the industry, which, we believe, means he is less likely to have preconceived notions about industry growth and competitors," Strasser wrote in a note. "This brings fresh perspective on various issues, including industry consolidation, product development and retail store growth across the industry."

While Saligram may not be familiar with the office supply business, he does have a strong background in consumer products, with a history of growing brands and managing professional services operations, which will allow OfficeMax to build upon the foundation built by Duncan, Strasser wrote.

Saligram also has experience with the international sector, which could foreshadow a global future for OfficeMax, Strasser wrote.

--Written by Jeanine Poggi in New York.

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