Restructuring Systemax Changes CEOs

Struggling under the weight of layoffs, falling revenue and the sale of its North American assets, technology retailer Systemax is making a change in the executive suite, elevating Larry Reinhold, its chief financial officer, to the roles of president and CEO, the company said Tuesday afternoon.

Reinhold will replace Richard Leeds, who will take on the role of executive chairman, helping guide the company's strategic direction and the development of new products and services, the company said in a statement.

Reinhold will take over as president and CEO on Thursday. He will continue in his role as CFO on an interim basis, the statement said.

[Related: Systemax To Lay Off 500 As It Shuts North American Technology Business]

Amid falling sales, Systemax -- No. 17 on CRN's 2015 Solution Provider 500 list -- said in November that it planned to spend $48 million to $55 million through the end of 2017 cutting 500 jobs, along with leases and inventory, after selling its $1.69 billion North American B2B assets (the North American Technology Products Group) to PCM -- No. 29 on CRN’s 2015 Solution Provider 500 list.

The transaction included the coveted TigerDirect brand, a longtime direct marketer of IT products.

The change in leadership announced Tuesday effectively removes the day-to-day control of the company from the Leeds family, who founded the firm in 1949 in the New York borough of Queens. (It's now based in Port Washington, N.Y.) Richard Leeds' brothers -- Robert and Bruce -- will continue to serve as vice chairmen, the company said.

"I am very proud of what we have accomplished and look forward to being part of the company's continued success," Richard Leeds, who is also company chairman, said in the statement. "Having worked with Larry [Reinhold] for nearly 10 years, I have the utmost confidence in his abilities."

When it revealed layoff plans in November, Systemax said the remaining roughly 500 employees in the North American Technology Products Group -- including 400 of Systemax's B2B sales reps across the U.S. and Canada -- were to be hired by PCM, a company spokesman said, with El Segundo, Calif.-based PCM assuming paid-time-off liability for certain Systemax employees.

Eight months earlier, Systemax unveiled plans to close a distribution center and 31 of the company's 34 retail stores, with those reductions affecting 1,500 of the company's then-4,000 North American employees.

During the fourth quarter of 2015, the company's sales plunged nearly 16 percent year over year, from $552 million to $465.3 million, while suffering an $11.6 million loss from continuing operations, Systemax said Tuesday. But that loss -- which amounted to 31 cents per share -- represented an improvement over the $21.8 million it lost in the fourth quarter of 2014.

For all of 2015, sales fell nearly 12 percent, to $1.85 billion. The net loss from continuing operations -- $48.3 million -- was more than 50 percent deeper than the $32 million loss the company reported for 2014.

In Tuesday's statement, Richard Leeds said the results reflected the decision to sell the North American B2B group. But "while this was a difficult decision" that carried heavy exit costs, "it will significantly improve our consolidated financial performance and streamline our business going forward," he said.

Systemax's stock opened the day at $8.37 on the New York Stock Exchange, but closed down nearly 11 percent, at $7.46.