Lumber Liquidators Holdings, Inc. (LL)

[Enterprising Investor]

Bank CEO taking on top spot at Lumber Liquidators (11/05/15)

With his Glen Allen bank on its way toward new ownership, John Presley’s next move is far from the cushy path to retirement.

Presley is prematurely leaving his post as CEO of First Capital Bancorp to take the role of chief executive of Lumber Liquidators, the Toana, Virginia-based discount flooring retailer that has been mired in controversy, slumping sales and a dwindling stock price in the wake of a scathing “60 Minutes” report and consequent federal investigation.

The leadership change was announced by both companies Wednesday. Presley will step down from First Capital on Nov. 13 and take the helm at Lumber Liquidators on Nov. 16.

The transition will speed up Presley’s previously announced departure from First Capital, a $616 million bank he has led since 2008. The bank and its parent company are in the process of being acquired by Charlotte-based Park Sterling Bank in a deal valued at $82 million.

Presley was set to move into a 30-month consulting role with Park Sterling upon the closing of that deal. First Capital said he’ll now take on a consulting role until the deal is finalized.

Presley wasn’t available for comment on Wednesday.

Steering the ship at First Capital in the interim will be Bob Watts, who is currently the president and CEO of the bank subsidiary. He’ll oversee the entire company until the Park Sterling deal closes, expected in the first quarter of 2016. Watts will then be moved into a senior role within the combined companies in Richmond.

Watts said in an email that he’s happy for Presley and thanked him for his leadership over the last seven years.

“John has been in a lead director role with Lumber Liquidators for some time and this possibility was not completely unexpected,” Watts said.

Presley has been on the Lumber Liquidators board since 2006, prior to its going public. He had been chairman since May. He succeeds Lumber Liquidators founder Thomas Sullivan, who had been acting CEO since May.

Presley leaves an eight-branch community bank that was on the upswing to take on a job that will expect him to lead Lumber Liquidators out of a low point in its history.

The company, which sells hardwood flooring from nearly 400 retail locations, has been under fire in recent months after “60 Minutes” reported that some of its Chinese-made laminate flooring contained levels of formaldehyde beyond some legal limits.

That resulted in dozens of pending class-action lawsuits and caused its stock to plummet from a high of nearly $70 in February to a low of around $12. The company also recently said it will pay $10 million in fines to settle allegations that it sold illegally harvested wood from protected areas of Russia.

The company reported this week that its sales were down 4.1 percent through the first nine months of the year and recorded a loss during that period of $36.6 million. That’s compared to a profit of $46 million in the same period of 2014.

The stock market apparently was in favor of Presley’s pending arrival, with the company’s stock jumping 10 percent for the day to close at $15.66 per share.

http://richmondbizsense.com/2015/11/05/bank-ceo-taking-on-top-spot-at-lumber-liquidators/