It’s the first week of April 2019. Lifetouch President and CEO Michael Meek has announced that he has made the decision to leave the company. He intends to remain until October while the company engages in a search for his replacement.
Let’s go back a year. It’s April 2, 2018. Imagine two one billion dollar organizations shaking hands and agreeing to share a common vision and heading off into the future telling themselves and others that they are stronger together then they are apart. A win win.
To do so one organization sheds its past as an employee owned company, sells itself and awakens the next morning as a division inside a publicly traded company. That was when Shutterfly announced that it had completed the $825 million acquisition of school photography giant Lifetouch.
Both are market share leaders in their respective industries. Both have experienced revenue growth through acquisitions. Both share a common consumer. Both have struggled in the recent past to demonstrate to shareholders that their model can withstand the pressures of technological change and consumer behavior. Both have seen their stock prices decline.
It’s 2019 and with it an interesting first quarter unravels. The combined company, a two billion dollar organization, is now one year into it’s transformation.
February – Shutterfly CEO North Stepping Down
February 5th Shutterfly Inc. President and CEO Chris North announced that he would be stepping down at the end of August 2019 in order to return to the UK with his family.
During the investors call later that day North reiterated his excitement in the company’s future and assured investors, “that the team and I are laser focused on executing our strategy and 2019 plans” and that he will support the board in identifying and effecting a smooth transition to his replacement.
February – Shutterfly Inc. Up for Sale
That same day another announcement was made by the company that surprised investors with the information that Shutterfly had been approached by a third party about the potential acquisition of the company.
During the Investor Q&A North explained that it makes sense to form a strategic review committee to look at potential expressions of interest in the company, the company’s capital structure, its debt and other strategic issues.
March – New President Appointed for Shutterfly Consumer
On March 8th Shutterfly announced the appointment of James Hilt as President, Shutterfly Consumer. North explained, “With the acquisition of Lifetouch last year, we now operate with three large divisions. Jim brings deep retail and ecommerce experience to this newly-created role leading the Shutterfly Consumer division, joining our other divisional presidents Michael Meek, Lifetouch, and Scott Arnold, Shutterfly Business Solutions.”
The need for leadership was more apparent after the consumer division’s disappointing 2018 with performance well below expectations. The major revenue engine – prints, cards and stationary declined in 2018 underperforming the market, which was relatively flat to modestly declining.
April – Lifetouch President Stepping Down
Michael Meek follows the lead of his boss and announces he is stepping down even though two months earlier during the year-end investor call Shutterfly appeared pleased with Lifetouch’s performance.
The schools and preschool business units met expectations for the year and schools reversed a negative trend by growing net accounts for the first time in recent history. Net results that appeared to be a bright spot for the company.
Going Their Separate Ways
In twelve months time the two individuals largely responsible for bringing their two companies together are leaving and going their separate ways…happy together or happier apart?
What will the month of May bring?
See more articles about Shutterfly and Lifetouch at pspconsulting.info
Mark Schoenrock, President PSPConsultingReport this
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