MONTREAL–Renewed doubts have been raised about Shermag Inc.‘s future after the furniture maker’s CEO quit yesterday, not long after promising to work with the majority shareholder to turn the company around.
MONTREAL–Renewed doubts have been raised about Shermag Inc.‘s future after the furniture maker’s CEO quit yesterday, not long after promising to work with the majority shareholder to turn the company around.
Jeffrey Casselman resigned “effective immediately,” the firm said in a release, and will be replaced during a search for a new leader by an executive management committee to be overseen by the board of directors.
“The board will become more active in the administration of the company, as it transitions to permanent new leadership,” chair Claude Pichette said in a statement.
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“The daily operation of Shermag will not be affected and we have every confidence that efforts made over the course of the next few months will be beneficial to the company in the long term.”
Neither Pichette nor majority shareholder George Armoyan, who heads Halifax-based Clarke Inc., would comment on Casselman’s departure or the future plans of the Sherbrooke, Que.-based company.
In mid-October, Armoyan and Casselman both said they would continue to work together to prevent Shermag from capsizing in what Armoyan described as “a perfect storm.”
Analyst Jordan Benincasa said Casselman’s resignation could signal that Armoyan plans to restructure or sell Shermag entirely.
The latter option would follow the strategy of successful investors such as Warren Buffett or Edward Lampert, who sold the assets of their acquisitions and reinvested in better-performing assets.
Benincasa doubts Casselman left of his own volition.
“This is his (Armoyan’s) trademark move here,” said Benincasa, whose company analyzes investment managers like Armoyan. “What he does is he likes to remove the underperforming managers and bring his own managers to turn these companies around.”
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