Tile Shop's low-profile CEO goes on offense

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: November 23, 2013 - 5:12 PM
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Former Viking E.J. Henderson, on behalf of his EJ Henderson Youth Foundation, joined teammates at Cub Foods in north Minneapolis on Tuesday to distribute Thanksgiving meals to those in need.

Photo: David Joles • djoles@startribune.com,

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The beleaguered brass at Tile Shop Holdings, who saw the stock price halved since a searing Gotham City Research report Nov. 14, visited big East Coast investors last week to try and allay concerns.

The hat-in-hand, no-media meetings with Tile Shop CEO Bob Rucker and CFO Tim Clayton were arranged by supportive Piper Jaffray analyst Peter Keith.

Keith, based in New York, reiterated his 12-month price target of $30 for a company that closed at $13.88 per share on Friday.

“We continue to hold TTS’ growth opportunity, competitive advantages, margins structure, growth initiatives and management team in high regard,” Keith said Wednesday in a note to investors.

Tile Shop is squarely in the sights of short sellers, who profit when a target company’s price swoons.

Daniel Yu, head of research at Gotham City, which usually takes adverse positions, predicted in the report that Tile Shop, which sells Chinese-manufactured tiles, will have to restate past earnings, is overstating its gross profit margins and has not reported questionable relationships with an export company associated with Rucker’s wife.

Tile Shop, which has hired PricewaterhouseCoopers to make an internal investigation, went public in 2012 through a shell company and had a good ride until the Gotham City report.

“I’m trying to figure out this situation,” Yu said on Friday. “There are [also] some board members who apparently want to get to the bottom of this.”

Rucker, 60, a career tile-industry guy who earned $3 million last year, has appeared tentative about running a public company at times. He declined interview requests through a New York PR firm.

Sandra Davis steps down but not out at MDA Leadership

Sandra Davis, co-founder in 1981 of what is now 32-employee MDA Leadership Consulting, was also the first woman in the Twin Cities to own and run an organizational development firm.

Earlier this month, Davis, a University of Minnesota organizational psychologist, turned over the CEO job to veteran MDA colleague Scott Nelson.

“I get to do ‘preferment,’ ” quipped Davis, 68, who eschews retirement. She’s out of administration, but will continue to lead MDA’s CEO & Board Services practices, as well as community work.

Davis, who also remains an owner of the firm, has gotten some notice in her trade for her recent book, “Pearls of Leadership Wisdom: Lessons for Everyday Leaders.”

“Our model for leadership has been ‘awaken, align and accelerate,” Davis said the other day over coffee. “Thirty years ago everybody was talking about the ‘right stuff.’

“But does anyone really want to follow those [macho] CEOs? Leadership is a two-way street. And the best leaders can connect with different people at all levels of an organization.”

Davis said good leaders she’s worked with include Richard Davis (no relation) of U.S. Bancorp, who started out as a teller while attending night college, and Greg Page of Cargill. She says both CEOs are good listeners, strive to learn, and tolerate dissenting views. She also admires Gloria Perez, who runs the Jeremiah Project, which helps working-poor single moms advance through housing and education.

Minnesota Cup adds new ingredient, international flavor

The Minnesota Cup, an annual competition that supports the development of “breakthrough business ideas” has added a food category. And it’s going international.

Minnesota Cup and LifeScience Alley are collaborating on a foreign-shores division in search of fledgling firms of less than $1 million in revenue with a Minnesota connection.

The statewide entrepreneurial competition also will launch the food, agriculture and beverage category for its 10th annual competition, which begins in March 2014.

Minnesota Cup backers also announced a record new prize total — $300,000 — for next year’s winners. The new division, focusing on food products and processing technologies, farm innovation and more, joins other Minnesota Cup divisions: energy and clean tech; high tech, life science and health, IT, social entrepreneur and student. More info: www.breakthroughideas.org.

SHORT TAKES

• Magnet 360, the fast-growing marketing-and-technology firm that has raised about $5 million from investors, including founder Skip Gage, has expanded its New York office and expanded to Chicago and San Francisco to serve existing clients and attract new ones, said Managing Partner Scott Litman, also a founder of the Minnesota Cup competition. Litman reports that Magnet 360 has nearly 100 employees and will achieve sales of about $25 million this year.

• The corporate holiday-giving news releases are flying in over the transom.

It’s all good, particularly when it leads to sustainable relationships. Once again, Cub Foods will distribute 1,500 free turkey meals to formerly homeless families and clients of People Serving People, Simpson Housing Services, Project for Pride in Living and St. Stephen’s Human Services on Tuesday at People Serving People downtown. Business and government officials will lend a hand.

And Minneapolis-based Core Distribution, which designs and distributes Perfect Sense flashlights and stylus pens to Target stores, will donate 50 cents for each $3 item sold, up to $250,000. The charity is St. Jude Children’s Research Hospital. “We believe that companies have an obligation to give back to the communities that support them,” said Core CEO Mitchell Kieffer.

 

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