Four days before Sunbeam reported first-quarter 1996 profit declines of 40 percent and sales declines of 4 percent for North American household appliances and 5 percent for outdoor products, Roger Schipke and two other Sunbeam directors resigned. Earnings had plunged 83 percent since July 1994. Sunbeam had lost market share in major stores in such key product categories as blenders, mixers, can openers, and out¬door grills. According to Wall Street analysts, the company's earnings had underper-formed expectations for five consecutive quarters. A Dean Witter analyst observed that Sunbeam was "really suffering from a lack of strong direction."1 Three months after Schipke resigned, the Sunbeam board—led by Michael Price—convinced Albert Dunlap to become chairman and CEO and take on the challenge of rejuvenating Sunbeam.
Just prior to the announcement of Dunlap's hiring, Sunbeam's stock price was trad¬ing in the range of $12 per share. The day of the announcement, it rose to $15 in after- hours trading, the following day it rose to $18, and in November 1996, when the revival plan for Sunbeam was made public, the stock traded in the mid-20s.