Online used-vehicle retailer Vroom Inc. announced on Monday that its chief operating officer, Tom Shortt, will join its board of directors and succeed Paul Hennessy as the company’s CEO.
The change is effective immediately, as Hennessy has “resigned to pursue other opportunities,” Vroom said. The company also released its first-quarter results on Monday, reporting e-commerce revenue of $675.4 million, up 60% from the year-ago period, and a net loss of $310.5 million.
Shortt’s appointment as CEO is the culmination of a planning process by the board to “ensure continuity of leadership” as he works toward several growth goals, said Robert Mylod, chairman of the Vroom board of directors.
“During his tenure as CEO, Paul oversaw Vroom’s transition from a start-up to one of the largest automotive retailers in the United States,” said Mylod, who will become independent executive chairman of the board of directors. vroom. “In doing so, he has recruited and trained an outstanding management team – including Tom Shortt – who are now poised to lead Vroom for years to come.”
Shortt, 53, joined Vroom as COO in early January. Prior to joining Vroom, Shortt worked as a senior vice president at Walmart, where he developed an e-commerce supply chain strategy.
Prior to Walmart, Shortt held leadership positions at Home Depot, ACCO Brands, Unisource, Fisher Scientific and Office Depot, where he oversaw supply chain, fulfillment and logistics.
Vroom to realign business
Vroom also said on Monday that its board had approved a plan to realign the online retailer’s business, which it hopes will lead to longer-term profitable growth. The plan calls for prioritizing vehicle economy, reducing operating expenses and “maximizing liquidity”, according to the company.
This includes reducing targeted vehicle unit sales to focus on “sustainable sales margins” and growing gross profit per vehicle, Vroom said.
The company also said it would consider downsizing and work to regionalize its business operations. It will attempt to reduce marketing spend, focusing on the channels that bring the company the best returns on its investment. Vroom will also continue to automate “key parts” of its sales operations.
Once the plan is in place, Vroom said, it expects to see cost reductions and operational improvements between $135 million and $165 million for the remainder of 2022.
Actions in Vroom rose 17.6% to $1.27 in aftermarket trading on Monday.
The company will hold its first quarter earnings call at 8:30 a.m. ET on Tuesday.
Vroom announced these financial results for the first quarter:
Total turnover for the 1st quarter: $923.8 million, up 56.3% from $591.1 million a year earlier.
Q1 e-commerce revenue: $675.4 million, up 60% from $422.3 million the previous year.
Net loss in Q1: $310.5 million, more than Vroom’s loss of $77.2 million a year earlier.
E-commerce vehicles sold in the 1st quarter: 19,473, up 25.6% from 15,504 a year earlier.
Q1 total gross profit by e-commerce vehicle: $1,763, down 14.2% from $2,054 a year earlier.