House2Home shakes up its management ranks and identity - Brief Article

Home Channel News, Sept 17, 2001

Officially changes name from HomeBase

IRVINE, CALIF. -- A shake-up in the corporate suite of House2Home resulted in the departure of executive vp-merchandise Scott Richards. Thomas Gallagher, executive vp-store operations, was named president and chief operating officer. Although Gallagher oversees merchandising, marketing and logistics, as well as operations, he was not given the CEO position; chairman Herb Zarkin retained that post.

The management shuffle, announced on Aug. 21, came at an inauspicious time for House2Home. The former DIY warehouse retailer -- which officially dropped its former name, HomeBase, on Sept. 8 -- just completed a rollout of its home-furnishings format. Over the next few months, the 42-store dealer must position itself in a marketplace fraught with difficulties for the most-established retailers. So far, sales at House2Home have not met company expectations. Last month, HomeBase reported a $37.6 million net loss for the quarter ended July 28.

Gallagher will fill the top spot that Zarkin held along with the CEO and chairman positions. Zarkin also serves as chairman of BJ's Wholesale Club. Prior to the announcement, much of the day-to-day decisions at House2Home were being made by Gallagher, Richards and chief financial officer Bill Langsdorf, according to a source close to the company.

"They had a three-headed monster there and they needed to figure out who was going to run the ship' said the source, who preferred anonymity. "Tom got promoted, and Scott didn't take it well."

Langsdorf confirmed that Richards left to seek a leadership role elsewhere. "Scott really is interested in going after a career opportunity that would enable him to be at a more senior level," explained Langsdorf, who will continue to report directly to Zarkin. "[Richards] left here on good terms," he added.

Richards, who served Home-Base since 1984, played a key role in the House2Home conversion. Prior to HomeBase, heworked as an operations and marketing manager for The Price Club, a San Diego-based warehouse-membership retailer that became Costco.

Before joining HomeBase in 1996, Gallagher spent 17 years in the supermarket industry. He also held the vp-operations position at BJ's Wholesale Club for five years.