Franklin Karp, president and CEO of Harvey Electronics, has left the chain following shareholder approval of a cash-for-equity deal led by Trinity Investment Partners LLC.
The transaction will provide the beleaguered New York-area A/V chain with a $4 million infusion, and will give Trinity and its investment partners control of Harvey's board.
In one of its first moves, the new management group replaced Karp, a 15-year veteran of the company, with Martin McClanan as interim CEO. McClanan was formerly CEO of RedEnvelope, a direct-sell gift business, and was president of Flax Art & Design, a San Francisco art supply house. He also held sales and marketing positions with Nestle and Ernest and Julio Gallo Winery.
The transaction is expected to close in two weeks. At that time, D. Andrew Stackpole, Trinity's founder and a former managing director in Merrill Lynch's Global Consumer Products group, will become chairman of Harvey, and the investment groups will receive $4 million in convertible preferred stock in exchange for the cash infusion. Trinity is a private equity firm comprised of former Fortune 500 CEOs from some of the world's most successful branded consumer products companies.
Harvey has said the investment is critical to the ailing business as it seeks to transform itself from a traditional retailer to a custom installer and integrator.
Harvey is a member of the PRO Buying Group and operates nine locations in the New York metro area. — Additional reporting by Steve Smith