How long the former COO will remain atop the firm is still being decided Global Motorsports Group announced a new CEO, the latest change in a year of changes for the Morgan Hill, Calif.-based distributor.
Dan Cook, previously the company’s chief operating officer, has been promoted to acting CEO after John Lott left to take a position with an East Coast private investment group.
The announcement came about eight months after Cerberus Capital Management, a private investment firm, became majority owners of Global and four months after the company announced it was closing half of its six warehouses.
Jeff Fenton, chairman of the board at Global Motorsports, said the benefits of those two moves “are going to start to be seen now as you really have a stable operation.”
Fenton reported the warehouses in Jacksonville, Fla., South Bend, Ind., and Fort Worth, Texas, have all closed now, with only the reallocation of some of that inventory left to be done.
“Everything has gone, I think, very well,” he said of the warehouse closings, “and we’re operating out of three locations at this point.”
Leading the company through those closures and accompanying layoffs was Lott, who left Global on Sept. 5 to work for The Winter Group, a New York-based company that works in the mortgage industry.
Lott told Powersports Business that his departure “was very amicable” and based on his desire to move back to the East Coast to be closer to his daughter. “Flying back and forth every other weekend was a little difficult and wasn’t fair to the company,” Lott said.
He also said the changes of the past year at Global did not lead him to look elsewhere.
“Anytime you have to make tough decisions, it’s difficult,” he said. “But we had a good partner in Cerberus and I think, quite frankly, that is all one can ask for.”
Whether his successor, Cook, remains CEO for the long term is something that hasn’t been decided, Fenton said.
“We want to make sure we have the absolute best CEO for the company,” Fenton said. “Dan’s a very, very qualified guy, but he’s not from the industry.”
That’s why, Fenton said, Global is waiting to decide if ultimately an executive with industry ties will be the future CEO or if Cook’s skills — his background is in the auto industry and technology businesses — will be a good fit with the current management team.
Fenton expects Cook to remain CEO for the next six to 12 months. “This is not something that’s going to be for a couple of months,” he said of Cook’s expected tenure.
What Global management will do in the next couple of months is decide, among other things, if they will again host vendor shows. Global did not have such shows this year for Custom Chrome or Motorcycle Stuff.
“Until we’re at a level that our customers are saying, ‘Heh, you are back and you are doing the right things,’ then all of this other stuff is less important,” Fenton said of the vendor shows.
“That’s a medicine the whole team has taken in a very positive way. Our customers have responded in a positive way. So next year I think things are going to open up for us.”
Part of that confidence comes from Global’s improving fill rates. Fenton said fill rates are currently in the mid to high 80s “from a starting point that was really pretty poor.
“Our goal is to have them above 90 percent and stay above 90 percent,” he said.
When Global shut down half of its warehouses, the company said it would redirect those savings into new inventory. Fenton said he expects approximately 80 percent of that new inventory, which will be shown in the 2007 catalog coming in February, to come from existing suppliers and the other 20 percent to come from new suppliers.
“We’re really looking at kicking off the year strong in Cincinnati with the V-twin side and obviously Indianapolis with the (Motorcycle Stuff) business,” he said. “So we have a more aggressive plan next year.”
What all that entails — including the possible return of the vendor shows — hasn’t been decided on yet, Fenton said.
“There will be some events around our customer base next year, we just have not defined exactly what they are,” he said, noting the decision of not having vendor shows “was not meant to be a long-lasting one.”
Copyright 2006 Powersports Business