ReBuild LL – A Proxy Fight to Boost Growth and Profits at Lumber Liquidators › Forums › General › Knolwes Underperforms AGAIN! › Reply To: Knolwes Underperforms AGAIN!
There are 2 ways to create profit at this company.
1) Increase sales in order to leverage SG&A.
2) Boost margin in order to make more profit from each sale.
Knowles and Co. have been able to accomplish neither. Knowles has been focused on margins for the last 3 years and they are heading down. That is reason enough to kick him out of the company.
To make matters worse, his focus should not even be on margins. He should be focusing on Option 1, which is to increase sales. A 5% increase in sales would do more than a 300bps move higher in margins. Let margins go down but focus on sales. Drive those profitable dollars. Just make money selling flooring, it’s really not hard. The company did it for 20 years before Knowles. And in the years since Knowles joined, it has never made a profit. Coincidence? No… It’s Knowles. He fundamentally does not know what he is doing. Hiring more managers and consultants does not change that fact.