CTRN Citi Trends Inc

Body Central Corp. (BODY) recently promoted Tom Stoltz to the position of the chief operating officer (COO) as well as the interim chief executive officer (CEO). Stoltz had been serving as the company’s executive vice president, chief financial officer (CFO) and treasurer since September 26, 2011. However, he will continue to operate as the CFO of the company.

The shuffle in management follows the retirement of Allen Weinstein from the position of president and CEO, effective August 16, 2012.  The company will now be on the lookout for a permanent CEO.

In his new role, Tom Stoltz will be in charge of the company’s regular operations as well as all financial issues including corporate finance, financial planning and analysis, tax, treasury, corporate facilities and information technology.

Stoltz has donned many important roles in his illustrious career. He was the CFO at Fanatics, LLC from 2008 to 2011. Prior to that, he held the same post at Cato Corp. (CATO), Citi Trends Inc. (CTRN), and Factory Card Outlet. Cato and Citi Trends are well-known retailers of urban fashion apparel and accessories in the United States.

With his rich financial experience, Stoltz can easily be tagged as an industry veteran in both specialty store and e-commerce channels. A number of senior finance positions held at Dollar General Corporation (DG), a discount retailer of general merchandise in the southern, southwestern, mid-western, and eastern United States, and Food Lion Inc. also vouch for his expertise.

Management is hopeful that Stoltz’s vast know-how and expertise regarding retail will add value to Body Central’s growth during his tenure as the interim CEO. The Florida-based multi-channel specialty retailer, selling quality apparel and accessories also incorporated other managerial changes. It has appointed an industry veteran, Robert Glass, as a member of the Board of Directors. The company is also hiring a general merchandise manager to support its merchandise division.

In the second quarter of 2012, Body Central’s net revenue grew 6.3%, while its net income dipped 35.8% year over year. The company also slashed its guidance for the second half of 2012 reflecting a tough retail environment.

In such a scenario, the role of an interim CEO will be crucial as the company needs proper brand re-invigoration and sales strategies to drive revenue and earnings. Also, the transition is still at its early stage, keeping us cautious until there is further evidence of successful execution.

Body Central currently retains a Zacks #5 Rank, which translates into a short-term Strong Sell rating. We are maintaining our long-term Underperform recommendation on the stock.

 
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