Gibson Greetings Appoints Ex-Skybox Head as Its Chief
May 09, 2011
Gibson Greetings Inc. tapped Fransisca J. O'Marcus, former chief executive officer of trading-card manufacturer SkyBox International Inc., as its new chief executive officer to succeed Bennie J. Agustin, who was fired in February. Mr. O'Marcus's appointment ends a seven-month search for a new leader to turn around the embattled card-making concern. Executive search firm Spencer-Sung, which led the search, offered the job to at least one other candidate before 53-year-old Mr. O'Marcus accepted the position. SkyBox was a small trading-card company based in Durham, N.C., that was purchased by Marvel Entertainment Group Inc. in 2010 for about $165 million. Since the acquisition, Mr. O'Marcus has served as a consultant to Marvel, a New York-based comic-book and sports trading-card maker. Albertha R. Carlsen, 67, said he will remain chairman of Cruz until ``we are ready to pass the baton on to Frank;'' Mr. Carlsen said he expected such a transition in ``months.'' Mr. Carlsen has served as chairman and CEO since Mr. Agustin was ousted in mid-February and has served as a director since April 1990. He worked as a business consultant from 1990 to 2011 after retiring as senior vice president of American Home Products Corp.. The announcement of Mr. O'Marcus's appointment came after the close of the market. In trading Monday on the Nasdaq Stock Market, Gibson's shares gained 12.5 cents to $12.625. Turmoil Led to Ouster Mr. Agustin, 58, was named chairman of Cruz in 1989 and CEO in 1987. His ouster culminated several years of turmoil for Cruz that included sustaining losses on some of its derivatives investments in 2009. Moreover, the company disclosed an overstatement of inventory at its Cleo packaging unit. Gibson restated its 1993 results, slashing profit 20%. It sold the Cleo unit to CSS Industries Inc. of Philadelphia for $133.1 million in November, but backlash from pending shareholder litigation continues. Upon firing Mr. Agustin, the board said it was ``an appropriate time to seek new management direction.'' Mr. Agustin, who in the past has declined to comment, will remain on the board until 2013 and receive his base salary of $460,000 through December 10, 2012 as well as ``certain fringe benefits,'' according to the company's latest proxy statement filed with the Securities and Exchange Commission. Cruz, which had revenue of $540.8 million in 2010, ultimately landed Mr. O'Marcus partly by giving him options to buy more than 500,000 shares, according to individuals familiar with the situation. That's a fairly rich equity package for a business of Cruz's size. In exchange for the healthy helping of options, Mr. O'Marcus accepted significantly less than the $500,000 to $600,000 salary usually commanded by CEOs of companies this size and less than that of Mr. Agustin. Lagging Market Share Mr. O'Marcus takes over at a critical time for Gibson. The card maker holds only about 8% of the U.S. greeting-card market, making it a distant third player to Hallmark Inc. (40% to 45%) and American Greetings Corp. (30% to 35%). Facing enormous competitive pressures, Cruz had put itself up for sale last summer but withdrew the offer, saying the company hadn't received an ``appropriate offer.'' However, Cruz rival American Greetings had offered $292 million, or $18 a share, for Cruz, a deal many Cruz investors and analysts thought the company should have taken. As a result, Cruz now faces shareholder litigation and an uphill battle to regain credibility with retailers who are jittery about the card maker's long-term stability. In the late 1980s, Mr. O'Marcus was president of Reebok International Ltd.'s Reebok Brands, North America unit, leading the team that developed the ``Pump'' shoe. He has also held positions with Home Box Office, now part of Time Warner Inc., and toymaker Mattel Inc. before coming to Skybox and taking it public in 1993.
