When Stein Mart Inc.'s previous chief executive resigned in 2011, Chairman Jay Stein took over as CEO on an interim basis as the company launched a search for a replacement.
However, nearly two years later, the Jacksonville-based fashion retailer is doing so well that it called off the search.
It has taken the "interim" tag off Stein's title and he intends to stay in the position for the foreseeable future.
"We've had so many adverse experiences (with previous CEOs) that we all decided to keep things as they are," Stein told the Daily Record on Tuesday after Stein Mart's annual shareholders meeting at the Museum of Science & History, near the company's Southbank headquarters.
"I know the team and they know me," he said. "We all feel good about it now."
Stein, 67, retired as CEO in 2001 but has remained chairman of the company founded by his grandfather more than a century ago.
Stein is the company's largest stockholder, controlling 34.7 percent of the stock, according to its annual proxy statement.
With his name on the company and his large stock holdings, Stein said he has a vested interest in seeing it succeed, and he thinks it's on the right path.
"I'm not going to do this forever but it's real important now to stay focused," he said.
Stein took over as interim CEO in September 2011, when David Stovall resigned the position after disagreeing with Stein on strategy. Stein wanted the company to focus less on coupons to attract customers and more on its historic strategy of offering everyday low prices.
Recent sales results show the strategy has been paying off. Stein Mart reversed a trend of declining comparable-store sales for several years with a 2.7 percent increase in fiscal 2012.
Comparable-store sales, which are sales at stores open for more than one year, are considered by analysts to be a key metric of a retailer's performance.
Stein Mart has continued to gain sales this spring, reporting comparable-store sales increases of 8 percent in April and 8.2 percent in May.
The strong sales, combined with the resolution of accounting issues that were overhanging the company, have pushed Stein Mart's stock to its highest level in almost four years. The stock has risen from about $8 two months ago to a high of $13.70 on Monday.
That's not the only reason shareholders are happy these days. Stein Mart on Tuesday also announced that it is reinstituting a quarterly dividend, which it suspended in 2007 as the economy slid into recession.
Stein Mart, which did pay a special $1-a-share dividend last December, intends to pay a regular quarterly dividend of 5 cents a share, beginning in July.
During the shareholders meeting, Executive Vice President and Chief Operating Officer D. Hunt Hawkins said Stein Mart's cash position remains strong, which is enabling it to pay the dividend. The company had $67.2 million in cash on its balance sheet at the end of fiscal 2012 and that increased to $83.9 million at the end of the first quarter.
"Clearly we are generating cash in excess of our capital needs," Hawkins said.
Stein told shareholders the company's recent results have been "spectacular," but it's not resting on its laurels.
"Certainly we're happy with our recent success, but we're very focused on the future," he said.
"Launching our new e-commerce business is the most important thing we're going to do this year," he said.
Stein Mart last month announced it is launching a major e-commerce initiative in the third quarter this year. Stein said customers have been "asking now for some time" for Stein Mart to offer more opportunities to buy merchandise online.
One item of business on the meeting agenda was scrapped: Shareholders were supposed to vote to ratify the reappointment of PricewaterhouseCoopers LLP as Stein Mart's accounting firm.
However, Stein Mart on Monday announced it was sending out requests for proposals to other national accounting firms as part of a review of its auditor relationship. As a result, PricewaterhouseCoopers, which has served as Stein Mart's audit firm since 1983, said it would decline to stand for re-election at the shareholders meeting.
Stein Mart's 2012 earnings report was delayed and it had to restate its 2010 and 2011 results after revising accounting procedures for a number of items.
"We are reviewing the proposals from various other firms now and we'll be selecting a new auditor in the very near future," Stein said Tuesday.
Stein finished the meeting by telling shareholders to "celebrate what we think is a minor victory making this company feel so good about ourselves."
When asked after the meeting why Stein Mart's recent results are a "minor victory," Stein said there is still a lot of work ahead.
"I don't take anything for granted, but I'm very hopeful," he said.
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