Former 7-Eleven CEO Seeking Blockbuster Results
James Keyes, the former CEO at the nation’s largest convenience store chain, 7-Eleven, has been named to help turn around Blockbuster Inc., the world’s largest video rental retailer that has lost money for nine of the past 10 years.
Mr. Keyes replaces John Antioco who was criticized for a compensation level that many felt was not justified considering Blockbuster’s stock had fallen some 70 percent since it was initially put on the market in 1999.
“John Antioco set the company up to succeed, but moved a bit too slowly in aligning costs and shedding non-strategic assets for the board’s tastes,” Michael Pachter, an analyst at Wedbush Morgan Securities, told Bloomberg News.
Under Mr. Keyes, 7-Eleven experienced eight straight years with same-store sales gains. Although he also served as 7-Eleven’s chief financial officer and chief operating officer in addition to CEO during his 21-year career at the convenience store chain, Mr. Keyes is known for being more than just a financial guy.
Barton Crockett, an analyst at JP Morgan Securities, wrote in a note that Mr. Keyes is “known for in-store merchandizing innovations at 7-Eleven.” According to Mr. Crockett, Blockbuster “could benefit from keener merchandizing to capitalize on new in-store traffic from Total Access.”
Total Access is Blockbuster’s subscription program that allows customers to rent DVDs online and either return them through the mail or at stores where they can pick up new titles.
Discussion Questions: What challenges are facing Blockbuster and is James Keyes the right person to help the company reverse its slide? How do you think he will go about achieving a change in fortune for the company?