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Thursday, January 24, 2008

New Advance CEO brings in trio of Best Buy brains

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New executives

Michael Norona

  • Role at Advance: Executive vice president and chief financial officer
  • Former role at Best Buy: President of financial services

Judd Nystrom

  • Role at Advance: Vice president of finance and investor relations
  • Former role at Best Buy: Senior director of retail finance

Kevin Freeland

  • Role at Advance: Executive vice president of supply chain and IT
  • Former role at Best Buy: President of the Musicland division.

Advance Auto Parts' newly appointed chief executive is shaping a team of leaders who have ties to electronics retailing, not selling car parts.

On Wednesday the Roanoke-based automobile parts and accessories retailer announced three new executive hires, who all are former employees of Minnesota-based Best Buy.

The move could lift sales at Advance stores, which have slowed in the past year, said an analyst who covers the automotive aftermarket industry.

It also reveals that CEO Darren Jackson, a former Best Buy executive, is lining up a team to follow his lead and further shape the company.

During a phone interview on Wednesday, Jackson, who began work this month, said the new employees will work with him in a new Advance regional office planned for Minnesota. They all reside in the Minneapolis-St. Paul area.

But Advance said its headquarters will remain in Roanoke.

"It's clear that Darren Jackson is trying to surround himself around people who are accustomed to his management style," said Cid Wilson, an analyst who covers Advance and works for Kevin Dann & Partners in New York.

Wilson said in a research report that he expects more leadership changes at Advance, the only Fortune 500 company based in the Roanoke Valley.

One of Jackson's new hires is Michael Norona, who will be Advance's executive vice president and chief financial officer. Norona, previously president of financial services at Best Buy, replaces Michael Moore, who resigned as Advance's CFO.

Advance's new vice president of finance and investor relations is Judd Nystrom, who was senior director of retail finance at Best Buy. Adam Bergman, Advance's former investor relations representative, left the company last year.

Kevin Freeland will be Advance's new executive vice president of supply chain and information technology. He formerly was president and founder of Optimal Advantage, a retail consulting firm. But for eight years prior to that, he worked for Best Buy in several leadership roles. He's replacing C. Roy Martin, who has resigned as senior vice president of supply chain.

Jackson, who also lives in the Minneapolis-St. Paul area, said in December that he planned to commute to Roanoke for the first six months of his job.

Afterward, he will work mostly out of Advance's new regional headquarters in Minnesota.

The office would be Advance's sixth regional location, though its exact site has not been named. It will employ 20 to 35 people.

Analysts say the new regional office is part of Jackson's talent-driving strategy. The Roanoke Valley is not as attractive an area to live as Minneapolis, they said.

"The Minneapolis airport is a hub for Northwest Airlines. It's a major metropolitan area," Wilson said. "People may be more inclined to move to Minneapolis than Roanoke."

Jackson took over a CEO post at Advance that had been vacant for more than six months. With his newly appointed executives, Jackson said he wants Advance to be more customer-centered with a focus on what drives people to buy.

He said he is encouraging his new leaders to "bring your people development skills and your passion for excellence. Help be a catalyst for change here."

Jackson takes the reins at Advance during a challenging time.

The company's earnings declined during the last three quarters in 2006. And for much of 2007, sales slowed dramatically at Advance stores open for a year or longer.

In August, the company unveiled a cost-cutting plan that included reducing the number of stores that it remodeled and opened this year. Advance also laid off more than 250 employees, including 31 in Roanoke.

Analysts responded positively on Wednesday to the executive changes at Advance.

Credit Suisse gave the company's stock a "neutral" rating, but it cited in a research report that "all three executives have very strong pedigrees, with success at Best Buy a common link among them (as well as Darren Jackson, of course)."

Wilson, who gave Advance a "buy" rating on Wednesday, said leaders with experience in electronics retailing should be an asset for Advance, particularly for sparking more sales and traffic at its 3,228 stores.

In a research report, he said the new employees "bring a corporate culture from Best Buy that promotes more entrepreneurialism, which we believe may eventually improve Advance's capacity to generate higher sales and increase operating margins."

Advance shares closed Wednesday at $33.60, up $1.37 from the previous close.

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