(Reuters) - Retailer Canadian Tire Corp (CTCa.TO) brought back company veteran Stephen Wetmore as chief executive in a surprise move that analysts said was driven by the board. Wetmore gave way to Michael Medline in December 2014 after five years at the helm. The company said on Wednesday that Wetmore will step down as the deputy chairman of its board but will remain a director.
The board and Medline likely disagreed over “the appropriate digital strategy, the pace of its implementation, or the role of acquisitions in implementing the company’s digital strategy,” analysts at Desjardins Capital Markets wrote in a note.
Canadian Tire has been investing in technologies such as an app that helps customers locate products in store and a recent interactive catalog that allows readers to access online information by hovering their phones over it.
The management suggested, said Canaccord Genuity, that the change in leadership was driven by the board, which felt Wetmore was a better fit to lead Canadian Tire through a rapid shift in the retail industry toward online sales.
The Toronto-based company, which sells auto, sports, leisure, home and other products, said it was bringing Wetmore back to lead the company “through the increasing complexities of the new world of retail.”
Wetmore will also be the company’s president. His appointment is effective immediately.
Canadian Tire’s shares fell as much as 3.7 pct to C$140 on Wednesday, its biggest percentage loss in more than four months.
“In our view, both Wetmore and Medline were major contributors to Canadian Tire’s success over the majority of the last decade, and we are surprised by the abruptness of today’s announcement,” Canaccord Genuity analyst Derek Dley wrote in a note to clients.
Reporting by Arathy S Nair and Vishaka George in Bengaluru; Editing by Kirti Pandey and Don Sebastian