MINNEAPOLIS - Finding a new chief executive officer for Nash Finch here is proving to be a difficult task for the wholesaler.
Since August, when Ron Marshall announced his plans to retire, Nash Finch has had discussions with several top executives in the retailing, wholesaling and manufacturing sectors, a source told SN last week.
Nash Finch declined to comment on specific candidates. However, in an interview last week with SN, Allister Graham, chairman and interim CEO, said the company had identified a potential successor to Marshall during the search process last year.
"Things did not work out when we began negotiating with that person," Graham said. "We have since resumed the search process, interviewing additional people through the end of 2005 and into the early part of this year."
One source said the ongoing investigation by the Securities and Exchange Commission into Nash Finch's accounting for vendor allowances and the recent probe into the timing of executive stock sales could impede the search.
Graham said he will remain interim CEO "for as long as it takes to get a new CEO in place," though he said he was unable to put a timetable on that process.
Graham said the earlier-than-anticipated departure of Marshall and the simultaneous disclosure of the stock-trading investigation are not related. "Divesting stock is common for an executive who plans to leave a company," Graham said.
As previously reported, the SEC had contacted Nash Finch last year about the timing of certain stock sales by executives, and Nash Finch conducted its own investigation into the matter. It then turned those results over to the SEC.
Marshall sold a large number of shares last summer, prior to the company's announcement that difficulties integrating two acquired warehouses would negatively impact earnings. He left Nash Finch on Feb. 15 - 2+ weeks earlier than his planned March 2 retirement date - "at my suggestion," Graham told SN.
"He had vacation time coming, and with a board meeting coming up [the week before March 2], I felt it would be awkward for someone in his position - who would be leaving within a few days - to be involved in a meeting that would be talking about affairs with which he would not be involved, so I suggested he take his vacation. It was no more sinister than that."
He said Marshall remained on the payroll through the date of his formal retirement last Thursday.
Marshall could not be reached for comment last week.
Kathleen McDermott, the company's secretary and general counsel - who also sold a large number of shares last summer - left Nash Finch the same day as Marshall. "She decided to leave. I have no comment on her reasons," Graham said.
McDermott also could not be reached for comment.
Although there was some degree of uncertainty among retail customers following the departures of Marshall and McDermott "for a period of time, we tried as best we could to assure retailers we are looking for a permanent replacement for Ron with whom we hope they will be able to work."
He said he also dealt with concerns by some senior staff people by meeting with them to assure them everything was OK.
He said the integration problems Nash Finch encountered at two distribution centers it acquired from Roundy's are improving. "Acquiring those facilities was a strategic move, although the integration could have been handled better in terms of not forecasting the kind of rapid improvements we did," he said.
The retail division is also improving, he said. "It's not having as many difficulties as it once did as we continue closing unproductive stores and in some cases selling them to existing customers," he said.
With regard to an SEC investigation of Nash Finch over vendor pricing, Graham said, "We have cooperated with them fully, and there is nothing else required of us."
Graham, 69, has been a member of Nash Finch's board since 1992 and chairman since 2000. He spent 43 years with Oshawa, a Canadian-based distributor.
