Movie Gallery Begins Personnel Restructuring12 Apr, 2006 By: Jessica Wolf
Movie Gallery has begun its previously announced personnel changes.The company last month, as part of its turnaround plan, said it will reduce its workforce by about 17%, or 300 jobs.
Starting that off is some executive reshuffling.
Movie Gallery April 12 announced that company CFO Timothy Price resigned for personal reasons. Temporarily, Movie Gallery SVP and treasurer Mark D. Moreland will handle Price's duties in addition to his current responsibilities, and serve as interim CEO.
Price was previously CFO for Hollywood Entertainment.
Three other former Hollywood Entertainment execs exited the company last week in favor of Movie Gallery personnel.
Silvio Piccini, formerly SVP of marketing for Hollywood, is being replaced with Movie Gallery's Mark “Bo” Lloyd, EVP and chief merchandising officer, who is now responsible for all product.
Joe Intile, formerly Hollywood's supply chain SVP departs the merged company with Jeff Klemp, Movie Gallery senior director of supply chain, taking over under the title SVP of logistics and distribution.
Timothy Winner, SVP of store operations for the Hollywood Entertainment division has been promoted to EVP of store operations and CEO of the Hollywood Entertainment division for the chain. He replaces Larry Plotnick, former SVP of store operations for Hollywood. Winner will be responsible for all Hollywood Video and Game Crazy store operations and marketing activities.
"We have already made great progress in reducing costs and enhancing efficiency," said Joe Malugen, Movie Gallery president and CEO. "[This] announcement will further our efforts to create value for shareholders and better position Movie Gallery for long- term success."
All the executives signed change of control agreements. In the company's merger report dated Jan. 9, 2005, those agreements consist of a severance equaling “two years of base pay together with bonus and medical premiums if within two years of the change of control.”
It's not surprising or out of the ordinary that the upper-level cuts fell heavily on Hollywood executives, said Arvind Bhatia, analyst with Sterne Agee. It could even open up some opportunity for the ousted executives.
“The industry hasn't exactly been that let's say, exciting,” he said.
And the financial community is taking the shuffle well, Bhatia pointed out. Movie Gallery stock actually bumped up a bit the day after the announcement (April 13), posting a 3% gain to $2.71 per share, shortly before market close.
It's all the beginning of a larger plan for Movie Gallery, which recently announced rather dismal earnings for 2005 and had to restructure its debt situation.
Store closings of redundant locations and more personnel cuts are in store this year as the company reconfigures itself to make a comeback, executives announced in earnings reports.
In addition to the four executive positions, the company cut another 5-10 management and administrative jobs, a spokesperson said.