EBay Inc. CEO Devin Wenig is stepping down amid pressure from activist investors to break the company apart.
Scott Schenkel, eBay’s chief financial officer, was appointed as interim CEO, the company announced Wednesday. EBay said it will seek a permanent CEO and consider internal and external candidates.
Paul Singer’s Elliott Management Corp., which owns a 4% stake, demanded in January that the company make “urgently needed” changes, including selling assets, such as ticket-selling site StubHub and the Classifieds Group, and buying back shares. In March, eBay reached an agreement with Elliott and another activist investor, Starboard Value, to appoint two new directors and undertake a strategic review of its portfolio assets. EBay said Wednesday it would provide an update this fall on the ongoing review, which is being conducted with the assistance of Goldman Sachs & Co.
Wenig took over eBay following its split with PayPal in 2015 and made bold promises of returning the marketplace to prominence. To compete against Amazon.com Inc., Wenig tried to freshen eBay’s image with younger shoppers, made the site easier to navigate and harnessed artificial intelligence to give eBay merchants real-time insights about what shoppers want and how much they’re willing to pay. But the results have been slow going and eBay has continued to watch Amazon grow at a much faster pace and gobble up more market share and customers.
EBay, ranked No. 5 in the Internet Retailer Online Marketplaces database and the second-largest U.S. marketplace, reported slow sales growth in 2018. On eBay’s U.S. marketplace, gross merchandise volume, or the value of all goods sold, grew 3.4% to $37.82 billion in 2018. This was a slowdown after U.S. GMV grew nearly 5% in 2017. GMV of eBay’s global marketplaces, including the U.S., grew 7.0% to $94.58 billion in 2018.
EBay sellers reported mixed results in sales on eBay, according to an Internet Retailer survey of marketplace sellers in May. About 19% of sellers say sales on eBay are growing, 15% say sales are flat and 9% say sales are declining this year (the remaining 57% surveyed don’t sell on eBay). The 9% of retailers that say eBay sales will decline this year is the second-highest of the 11 marketplaces retailers were asked about. Comparatively, only 3% said sales on Amazon are declining and 1% said sales on Walmart are declining. 12% of respondents said sales on Jet will decline this year.
EBay’s financial reports this year have showed continued paltry growth, with revenue increases of only 2% in the first two quarters, and analysts expect no increase in the third quarter and a decline of 1% in the fourth, according to estimates compiled by Bloomberg. Gross merchandise volume fell 4.4% to $22.6 billion in the second quarter from a year earlier.
In July, eBay took a step toward free and faster shipping through its new program Managed Delivery. Managed Delivery, set to launch in 2020, offers sellers the option to work with eBay to store, pack and ship their products. When sellers use Managed Delivery, they have the option to offer free shipping with faster delivery times (two days or fewer) to customers on eBay. Product pages will have labels that show which products are eligible for free and fast shipping.
Wenig had tried to differentiate eBay from Amazon by emphasizing that eBay didn’t compete with sellers by selling it’s own similar products and he downplayed the importance of fast shipping, saying eBay wasn’t the place for shoppers who want paper towels in an hour. Instead, Wenig highlighted eBay’s inventory of unique items.
Bloomberg News contributed to this report.