Fresh Market shakeup surprises analysts, displeases investors

The sudden departure of Fresh Market CEO Craig Carlock took some analysts by surprise but they said it didn’t necessarily portend a crisis at the upscale specialty retailer.

As reported by SN Monday, Carlock, a 15-year veteran of the company and its CEO since 2009, resigned as CEO and from the company’s board of directors. EVP and COO Sean Crane was named interim CEO while the company launches a national search for a successor. That represents a bit of a change for The Fresh Market which historically has hired its leaders from within.

Craig Carlock

“It seems unusual to us that someone with as much history with the company as Mr. Carlock would leave without grooming a successor,” Chuck Grom, an analyst following The Fresh Market for Sterne Agee, said in a research note. Grom noted that Carlock was admired by Ray Berry, the company’s founder and board chairman, whose family still holds a large stake in The Fresh Market.

Berry in a statement praised Carlock for his role in taking the company public, and helping it to post increases in sales and earnings during his tenure. He also stressed that the company was maintaining its sales and earnings forecast for the fourth quarter, although stock was down by more than 10% early Tuesday.

Although the departure was sudden, it may have been in the works for months, according to Kelly Bania, an analyst for BMO Capital Markets. In a research note published Tuesday, Bania said the change indicated the board may look to move more aggressively on plans to enhance shopper frequency through marketing initiatives Carlock detailed in a presentation last fall.

Although there was some industry speculation that Carlock could turn up at Jacksonville, Fla.-based Bi-Lo Holdings, which said last week its CEO had stepped down, sources told SN Tuesday that such a scenario was unlikely.

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Carlock joined The Fresh Market as its director of marketing strategy in 1999 following several years as a financial executive with Proctor & Gamble. He was appointed to succeed Brett Berry as CEO in 2009, and took the company public in 2010. Carlock’s tenure included a failed effort to expand the brand to California, where its three stores closed last year and triggered the current strategy of expanding in existing markets.

Crane has served The Fresh Market since 2000 when he joined as corporate controller. He was promoted to COO in 2012.

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