Michaels Stores CEO John Menzer on Medical Leave After Stroke

Michaels Stores announced today that they are forming an interim Office of the Chief Executive to manage the company in the ongoing absence of CEO John Menzer.

The company had previously announced on April 20th that the 60 year old Menzer was hospitalized in stable condition, but they declined at that time to indicate the cause of his illness. Today’s announcement, the first update on his health situation from the company since that day, indicates that Menzer suffered a stroke last month and is in stable condition but is expected to be absent from the company for an extended period of time. The announcement says that the Board of Directors will reevaluate Menzer’s status periodically. Menzer has been CEO of Michaels Stores, Inc. since 2009.

Menzer has been in the news recently for the role he held previous to his tenure at Michaels, as Vice-Chairman of Wal-Mart. That company is under investigation by the U.S. Department of Justice for the alleged payment of bribes by its Mexican subsidiary during a period of rapid growth in that country. The New York Times named Menzer as one of the key players in the U.S. company’s cover-up of those alleged actions.

The new Office of the CEO at Michaels Stores, Inc. will consist of Lew Klessel, who is Managing Director with Bain Capital Partners, LLC, and Charles “Chuck” Sonsteby, who is Michaels Stores’ Chief Administrative Officer and Chief Financial Officer. Mr. Klessel has also been appointed to the newly-created position of Interim Chief Operating Officer at Michaels. Klessel and Sonsteby, as the Office of the CEO, will temporarily assume Menzer’s responsibilities as CEO, and will report directly to the Board of Directors.

Klessel is the executive at Bain Capital who manages their investment in Michaels Stores, and he also serves as the Bain representative on the Michaels Board of Directors – which means in his new role in the Office of the CEO that he reports, at least partially, to himself.

It is a sensitive time for the company’s CEO to be absent, as the company recently announced plans at the end of March to launch a $500 million IPO offering of company stock. The company’s private equity ownership stressed in the announcement their confidence in the interim leadership:

“First and foremost, the thoughts of the entire Michaels family continue to be with John and his family during this difficult time and we are all hopeful for his full recovery,” said Matt Levin, Managing Director with Bain Capital Partners, LLC. “By establishing the Office of the CEO on an interim basis, we will ensure ongoing leadership continuity for the business.”

Peter Wallace, Senior Managing Director with The Blackstone Group L.P. added: “The senior management team has been instrumental in developing new strategies and initiatives to drive the company’s growth performance and we are completely confident in their ability to continue to drive business results. Lew is a seasoned executive with extensive management and operations experience who, together with Chuck in his expanded role, will ensure the execution of the company’s strategic plan.”

A holding company controlled by The Blackstone Group and Bain Capital currently owns approximately 93% of Michaels Stores stock.

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9 Responses to Michaels Stores CEO John Menzer on Medical Leave After Stroke

  1. ana Cordero May 16, 2012 at 7:00 pm #

    It is sad how someone is going throught health issues…and can not get a break form negative cognitations…

    • Nancy Nally May 16, 2012 at 10:29 pm #

      Well, I know better than anyone that the bad and stressful stuff in your life doesn’t go away because you have health issues.

      • ana cordeto May 16, 2012 at 10:54 pm #

        Yes, I agree. But, the news you were posting was on his health and the way the issue was been handle since he was not able to perform his job. It was about the.steps that had been taken beacuse of that. But you had add the (lemon juice) other issue….not relevant to my opinion.

        • Nancy Nally May 16, 2012 at 11:21 pm #

          Actually it’s relevant to include it in the article for two reasons.

          First, it’s standard practice from a news standpoint to give a recent history of the subject of an article like this as background for readers to provide context for today’s events, and the Walmart bribery investigation is something ongoing and serious involving Mr. Menzer. Frankly, it would have been remiss of me to NOT mention it as part of his history at Michaels Stores in the background that I provided.

          Second, there is a direct relationship between the two events. There has already been concern about the effect that Mr. Menzer’s involvement in the Walmart investigation will have on the Michaels Stores IPO, because the last thing that a company wants is uncertainty or turmoil at the top when it is going through an IPO. Now, on top of that, Mr Menzer’s health (and how long he will be away from his job) is uncertain. It definitely compounds the uncertainty surrounding the stability of the CEO position at Michaels during the IPO process that is ongoing. And investors don’t like uncertainty.

  2. ana Cordero May 16, 2012 at 11:47 pm #

    You had already told that story and I read it… Please If you want me to agree with how you are telling the story I will not. Because if this kind of negative and unconsider comments like your’s people have lost touch of being kind and respecful to one another. We have become so cold and careless! How about just saying he is sick and there for the company is looking for a different way to conduct their regular busness. I am a simple stay at home mom that happends to be a Micheals instructor….and I don’t agree on how you are under minding the fact that he is sick…Not everyone has to agree with you. And the same you don’t have to agree with my point. I am just letting you know that you are missing the human aspect of story telling.

  3. Cyndy R May 17, 2012 at 6:45 am #

    Great reporting Nancy. I think its interesting and very convenient for the company that at such a critical time he is now on medical leave away from the spotlight (just my cynical thinking brain about big corporations and spin control).

    • Nancy Nally May 17, 2012 at 8:09 am #

      It is a tempting thought – we get so cynical these days, don’t we? However, from an investor standpoint it really is a negative having leadership of the company in flux so this actually is a negative for them.

      There could actually be a link between Mr Menzer’s job, the Walmart scandal, and his medical troubles, but not a nefarious one: stress can actually cause strokes, and I’m sure Mr. Menzer must have been under a lot of it at the time of his, which occurred around the same time that the Walmart story was broken by the NY Times.

      • Cyndy R May 17, 2012 at 9:04 am #

        Yes you are probably right Nancy. I think its just politicians that disappear from the spotlight when its time to answer questions.

  4. Sharon May 17, 2012 at 12:42 pm #

    To answer Ana C’s comment about the human side of this multi-faceted story, it’s a tragedy that a stoke, which is, in medical terms, a vascular insult to an area of the brain, has occurred at this time for Mr. M. Just when he needs his full faculties the most, to explain and bring rationale to his role in the activities of the two companies, he is in a fagile state of health. I feel for his wife and family. Although these controversies are played out at the corporate level, their very personal impact is at home. Until all the facts of the case are made public, we are not in a position to judge right or wrong, only to send our empathy to the family for the situation they find themselves in. And so, I offer them my human empathy.

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