The last surviving co-founder of Office Depot Inc. abruptly resigned late Friday, the fast-growing Boca Raton-based office supply retail chain said Monday. While company officials insisted there was no bad blood between former president Steve Dougherty and higher management, analysts suspected such friction was behind Dougherty's surprise resignation.
"I have no comment other than it was just a build-up of things," said Dougherty, who handed his resignation to David Fuente, chairman and chief executive. "I gave them the five months' advance notice required in my contract, fully expected to work through July and was surprised when I was told not to come back to work Monday."
Fuente said Dougherty will continue drawing his $160,000 annual salary as a "consultant" until July.
The nation's fastest-growing office supply super store with 72 stores, Office Depot has run into heated price competition in some markets, including Tampa Bay, where it is engaged in a bitter fight for dominance with St. Petersburg-based Workplace. Earlier this year Workplace filed a $20-million lawsuit alleging Office Depot was engaged in false advertising to curry customer favor.
Dougherty, the only chief operating officer in Office Depot's short history, co-founded the chain three years ago with Pat Sher, who died of leukemia. The two were both top-level executives with the former) Lindsley Lumber Co., a Miami-based home improvements retailer that once was a major player in Tampa Bay. Fuente, who ran the retail group of Cleveland-based paint maker Sherwin Williams Co., replaced Sher as chairman and chief executive in 1987.
Office Depot's stock dropped 87 1/2 cents a share to $15.14 1/2 in over-the-counter trading. That's down from a 52-week high of $27.25.
Some analysts think the stock was bid up to the point many investors thought overpriced.
"You've got to divorce the stock from the company and look at it long term," said Dave Childe of Robertson, Stephens & Co. in San Francisco. "They beat most earnings forecasts for the fourth quarter.
Wall Street failed to recognize that in many markets where they are running into heavy competition, Office Depot has lower prices."
The stock had rebounded from a low of $13 a share, thanks partly to Carrefour Nederland B.V. The Dutch supermarket chain recently increased its stake in Office Depot to 17 per cent from 11 per cent, buying shares at depressed prices on the open market.