WSJ: Blockbuster Seeks New CEO12 Oct, 2010 By: Erik Gruenwedel
Bankrupt Blockbuster Inc. has reportedly hired a senior executive recruiter firm aimed at possibly replacing CEO Jim Keyes by the end of the year.
Los Angeles-based Korn/Ferry International has been retained to fill key senior executive positions, including CEO, according to a report in The Wall Street Journal. A Blockbuster spokeswoman wouldn’t comment on the report.
Any switch in the chief executive position at Blockbuster would have to be approved by the bankruptcy court, in addition to senior lenders such as former board member Carl Icahn.
Dallas-based Blockbuster filed a pre-packaged Chapter 11 filing Sept. 23 listing debts in excess of $940 million.
A Blockbuster spokeswoman told Home Media Magazine it is “moving forward with what is consistent with our public disclosures and the requirements of the recapitalization plan. Jim remains fully engaged and committed to the business and the plan. This includes active participation in normal succession planning.”
Keyes, who formally headed Southland Corp., parent of 7-Eleven stores, has been CEO of Blockbuster since 2007.
Though generally well-received by the media and Wall Street, Keyes came under increasing fire by investors who believe the CEO was not forthright in the Blockbuster’s deteriorating fiscal condition leading up to the bankruptcy.
Edward Woo, retail analyst with Wedbush Securities in Los Angeles, said it's debatable whether Keyes needs to be replaced.
"Unfortunately, given the tough situation that Blockbuster is in, there can be a good argument to bring in new blood to really change things up since the previous changes weren't working fast enough to keep Blockbuster out of bankruptcy," Woo said. "The other argument is that Blockbuster has too many issues to subject a new CEO with little exposure to the company's history to grasp in a short time.
Separately, Blockbuster reported it lost $152.2 million from January through August on revenue of more than $2.1 billion.