DALLAS -- The resignation of Bill Fields as Blockbuster Entertainment's chairman and chief executive officer will not have an immediate impact on the chain's planned expansion into supermarkets, according to a Blockbuster official.
Fields' departure last month, which according to a Viacom release was "by mutual consent," comes as the chain is in the midst of relocating its headquarters from Fort Lauderdale, Fla., to here. About 300 of the 900 people employed in Florida have chosen to relocate, leaving many key positions within the company unfilled.
A company official, seeking to minimize the impact Fields' exit will have on the chain said, "Bill Fields was one employee. In the week that Bill Fields resigned, 600 store associates joined Blockbuster." Wall Street apparently disagreed. Fields' resignation sent parent company Viacom's stock tumbling to a new 52-week low of $27.38.
Fields left a high-level position at Bentonville, Ark.-based Wal-Mart Stores in April 1996 to join Blockbuster, a division of Viacom, New York. After leaving Blockbuster, he was named president and chief executive officer of Canada's largest department store chain, Hudson Bay Co., Toronto.
At Blockbuster, a number of initiatives that were begun during Fields' tenure are in various states of completion. For example, Blockbuster corporate had recently expanded its "store-within-a-store" program in which the company located small leased space Blockbuster shops inside host retailers, such as Wal-Mart Supercenters. The company opened its first corporately-operated supermarket shops this spring in two Parkersburg, W. Va., units of Big Bear Stores, Columbus, Ohio. A Blockbuster franchisee, Buckeye Entertainment, Dublin, Ohio, has operated three Big Bear departments for about a year.
Under Fields, Blockbuster had also been expanding its product mix in an effort to become more of a total entertainment software destination. In addition to sell-through and music, the retailer is moving aggressively into digital videodisc software, with a demonstration program with Sony slated to start soon, according to sources.
Other projects in the works include the headquarters move, a substantial expansion of the store base and a change to direct buying for the entire chain, cutting out distributor ETD Entertainment Distributing, Houston.
According to press reports, analysts believe that Fields' resignation will weaken the troubled Viacom division. "This is clearly a blow to the company," said Smith Barney analyst Jill Krutick. "He was held out as a savior."
Viacom bought Blockbuster counting on it to provide the cash needed to finance its acquisition of Paramount Communications, Hollywood, Calif. However, with a slower market for video rentals early this year and a change in accounting methods, the cash flow was not what was hoped for. Fields' plans for Blockbuster's expansion apparently conflicted with Viacom's need to cut costs, said analysts. Viacom now plans to spin off a separate class of Blockbuster stock in early 1998.