The Tampa apparel maker fires its CEO and other executives as it seeks to streamline operations in a difficult market.
By SCOTT BARANCIK
Published August 13, 2003
TAMPA - In its second management shakeup in less than a year, apparel maker Tropical Sportswear Int'l ousted its chief executive and two other top officials Tuesday.
The troubled Tampa company said its board fired president and CEO Christopher Munday, chief financial officer Larry McPherson and general counsel Gregory Williams, replacing them with existing staff or directors.
Tropical offered scant explanation for the coup. Its news release said only that the "structural changes will further streamline the business by focusing the operations under one well-qualified president." Company officials did not return calls seeking further details.
Munday rose to power after the November ouster of former CEO William Comptom, who left the company amid questions about his use of corporate funds for personal purposes. Tampa attorney Seth Rodner, who represents Compton, said his client remains a Tropical shareholder but had "no involvement" in Munday's firing. Compton has denied wrongdoing.
That wasn't all that Tropical revealed Tuesday: After hiring Merrill Lynch in June to help explore its strategic options, Tropical has decided to stay public, rather than sell to private investors or take some other detour.
Newly installed CEO Michael Kagan said remaining a public company was "the best alternative for increasing shareholder value."
Kagan retired from Tropical as chief financial officer in August 2002 but was appointed board chairman during November's fireworks. He will remain a member of the board but was replaced as chairman by director Eloy Vallina-Laguera. Private-brand chief Richard Domino was named the new company president, and senior vice president of finance Robin Cohan was appointed CFO. The company did not name a replacement for general counsel Williams.
The terminations are effective Friday. Tropical said Michael Mitchell, president of the company's Savane slacks division, has also agreed to step down.
After Compton's departure last year, Tropical wrote off related expenses of $5.7-million. The company did not estimate the costs associated with the latest staff changes but said it would write them off in the current quarter. Munday and Williams each earned at least $1-million in salary and bonuses in 2002. McPherson received more than $450,000.
Tuesday's announcements came after the market closed. Tropical's stock finished the day at $5.42, up 25 cents per share, or 5 percent.
During his short stint as CEO, Munday took several measures to improve Tropical's bottom line, including selling its two corporate airplanes, adding stretchy fabric and stain-blockers to its Savane brand of casual men's pants and shorts, delaying a decision to move into the company's new $16-million headquarters and cutting dozens of middle-management positions.
But Munday got off to a tough start last year. In his first quarterly report as CEO, the company lost 45 cents per share versus Wall Street's expections of a one-penny loss. He also sold the company's Duck Head brand after a disastrous, two-year run.
But the economy and cost pressures in the apparel industry haven't helped.
Tropical was dropped from the Russell 3000 index of the largest public U.S. companies this summer. In the quarter ended June 28, it lost $2.75 per share, equivalent to nearly half its stock price, and its revenues fell 16 percent over the prior-year quarter.
In retrospect, a statement Munday made at Tropical's annual shareholders meeting in January seems prophetic.
"If we don't need something, we are learning to live without it," he said. "There are no sacred cows."
- Times researcher Caryn Baird contributed to this report, which also used information from Times files. Scott Barancik can be reached at firstname.lastname@example.org or 727 893-8751.