Amid turmoil, TruServ names new finance team - TruServ Corp. moves to stabilize financial status - Brief Article - Company Profile - Statistical Data Included

Home Channel News, July 2, 2001

In response to ongoing fallout from 1999 debacle, buying group restructures

CHICAGO -- TruServ Corp., the troubled dealer-owned buying group, last month added five associates to its financial team. Their task, according to the co-op, will be to "drive change" in the organization and help steady TruServ's shaky financial status.

The staff additions are part of a broader restructuring of TruServ's financial team that will have a controller partnering with each of the co-op's specific business functions and divisions including marketing, merchandising, sales, operations and support groups.

TruServ spokesman Bruce Bunschoten said that the new hires and the team approach are in response to the ongoing fallout from TruServ's loss of $13.1 million for fiscal year 1999. At the time, the co-op's dealer-members learned their stock had dropped in value by nearly 65 percent. Since then, a moratorium has been placed on stock redemption, which has resulted in two lawsuits against the co-op in which plaintiffs allege that TruServ violated its own bylaws.

As a result, TruServ officials have been forced to assure members that they could get their financial house in order and close a credibility gap that has resulted in a number of dealers leaving the co-op.

"This is part of the delivery on that promise," Bunschoten said. "I think it's sending a very positive message. We've gone out and gotten some very high-caliber people. We're establishing a layer of accountability that wasn't there in the past. We're putting finance people close to the day-to-day issues."

Among the new hires is David Shadduck, who takes over as vp and corporate controller. Previously he was controller of Tenneco Automotive's aftermarket division. Shadduck's responsibilities will be updating the reporting and control methods of TruServ's forecasting process.

"Dave will be a critical player as we implement our vision for the finance team," Pamela Forbes Lieberman, the co-op's chief financial officer, said in a prepared statement. "He has consistently proven his ability to drive change and reduce corporate costs by implementing more efficient practices and systems."

Joining TruServ as its new vp and treasurer is Barbara Wagner. Wagner will be responsible for managing the co-op's relationships with lenders. Robert Levin arrives at TruServ as controller of sales, merchandising and marketing. Anthony Poidomani Jr. acts as supply chain and niche business controller, while Mary "Jeannie" Lynch was named as director of internal audit.

Collectively, the team has more than 67 years of financial experience.

Between 1999 and 2000, wholesale sales dropped from $4.5 million to 4 million at TruServ. During that same span, the co-op not only reduced its distribution-center count from 19 to 16, but also cut its work force, from 5,478 to 4,728 employees. Since 1998, administrative personnel have been reduced by over 40 percent.

For first quarter 2001, TruServ absorbed a 12 percent decline in sales, and since June 1 the co-op has released 45 salaried employees and said its employee count will be further reduced by 5 percent. Lieberman has also said more distribution centers may close.