Cars.com CFO Goes From One Spinoff to Another – Wall Street Journal (subscription)
Spinning off from a parent company, as Cars.com is in the process of doing from Tegna Inc., can be stressful. But Becky Sheehan, the newly minted finance chief of Cars.com, is a spinoff veteran.
Ms. Sheehan joined the Chicago-based online auto marketplace in mid-January. She was previously the chief financial officer at FTD Cos., an online gift retailer specializing in flowers, and played a prominent role in FTD’s spinoff from United Online Inc. in 2013.
She has now switched gears to lead Cars.com’s spinoff from Tegna, a media and digital-business conglomerate.
Cars.com’s website lists new and used vehicles for sale and automotive services, backed by customer and expert reviews. It works with 20,000 local dealerships across the country as well as auto makers including Ford Motor Co., Toyota Motor Corp. and Audi AG.
Ms. Sheehan spoke with The Wall Street Journal about the challenges of a spinoff and her journey from flowers to cars. Here are edited excerpts.
Preparing for the spinoff
WSJ: As Cars.com gets ready to spin off, what are your top priorities?
MS. SHEEHAN: A fair amount of work regarding the spinoff has already been done with our parent company, Tegna Inc., and with the existing [Cars.com] team. My priorities are really focused on making sure that our infrastructure and our teams are ready for this transition.
WSJ: What do you think you need for it to be ready? Are you planning to institute your own IT and financial accounting systems?
MS. SHEEHAN: The wonderful thing is that Cars.com has many of the IT and financial systems already in place, separate from Tegna. That gives us a step forward in not having to create and build that kind of infrastructure. But Tegna does all of our treasury management. They manage all of the cash flow, debt and financing. What we do need to do is round out the finance and the accounting team with the new competencies, dealing with treasury and investor relations, that we didn’t need to have before.
Focus on investors
WSJ: What challenges did you face in your previous spinoff that you’re better prepared for now?
MS. SHEEHAN: I think it will be really important for us to make sure that our investor messaging, as we become our own public company, is very specific to the digital automotive industry. It is going to be very different from how Tegna communicates with its investors about what’s happening in the media landscape. That was one of the clear challenges we had in my last experience as well, because our e-commerce flowers and gifting business was quite different from our parent company, United Online [which provides marketing solutions and internet-access services].
WSJ: How did you deal with that challenge at FTD, and how do you think that experience will help you handle this challenge?
MS. SHEEHAN: The main difference was the investor base we had with our parent company pre-spinoff and the investors we believed would be interested in holding FTD post-spinoff stock. We anticipated some turnover in the investor base beginning right after the spinoff, so we traveled and met with various possible investors to tell the company’s story. The meetings included one-on-ones and larger group lunches in cities such as New York, San Francisco, Milwaukee, Chicago and Denver, and were coupled with a significant amount of phone calls as well. I think this experience has provided me with significant knowledge and capabilities in investor communications that will certainly apply to Cars.com.
The importance of mobile
WSJ: How important is the mobile app for the business?
MS. SHEEHAN: It is a critical component as we look forward. Mobile car shopping, I believe, is a trend that will have really big growth as we look forward.
WSJ: But cars are something you invest in occasionally. Customers are likely to delete the app to make space for other apps. How are you seeing sustained growth in that aspect?
MS. SHEEHAN: I agree, you’re not going to buy a car with great frequency, most consumers don’t. But Cars.com isn’t just for car shoppers, it is also for cars owners through the complete life cycle. We’ve got some really important consumer-facing services and features to make sure you get connected to the right service provider at a fair value.
WSJ: What suggestions do you have for CFOs in the e-commerce space?
MS. SHEEHAN: I think it is important for them to challenge the status quo, because consumers and trends evolve fairly quickly in the digital space.
For example, it may have been that consumers went online in the auto industry two years ago only to research very specific features of a car. Today, they want to know the breadth of services available, they want to know where they should go to make that purchase. They also read online reviews more than they did five years ago. The population of online reviewers has grown significantly, and we’ve been able to garner that consumer engagement by having more reviews on our site than others in the industry.
Anticipating customers’ needs
WSJ: How did your experience with cars or flowers help you explore what consumers need? Any other ways you are trying to anticipate customers’ needs?
MS. SHEEHAN: It is easy for me to think about my own experience with cars. I recently bought a new car, and making a decision about it was overwhelming. Poring through independent research sites and consumer reviews to read and consider when making a final decision was critical to my purchase process.
At Cars.com, we love our cars but realize that the decision-making part can be quite stressful. So we’re adding features to our site such as pricing tools that help consumers make decisions about how much to pay for a car. We also have new app features such as Price Drop Alerts, which alert shoppers when a car they’re interested in has gone down in price, and a new VIN Scanner, which allows shoppers to scan any VIN [vehicle identification number] of a car on the dealership lot to get more information about the vehicle right on their phone.
In that vein, it is critical for CFOs to think about how they can help customers as the company moves forward, what more can they offer customers, how they can create a need by anticipating a need. I learned this through discussions with internal leaders and a broad set of employees in almost all functions.
Ms. Rao is a Wall Street Journal reporter in New York. She can be reached at firstname.lastname@example.org.