Staples Inc., parent company of Top 40 distributor Staples Promotional Products (asi/120601) announced this week that CEO Ron Sargent will step down after the company’s annual shareholders’ meeting on June 14. Sargent has led the company since 2002, after taking over from a Staples co-founder. He will remain the chairman through the end of the fiscal year in January.

Staples said Sargent agreed to resign just weeks after a federal judge prevented a $6.3 billion acquisition of Office Depot Inc. The company has named Shira Goodman the interim CEO and has appointed executive recruitment firm Korn/Ferry International to head the search for a permanent replacement. Goodman has been with Staples since 1992 and became president of North American operations this past January. Sargent joined the company in 1989 as a regional vice president.

“The entire board would like to thank Ron for his nearly three decades of dedicated service and leadership at Staples,” said Robert Sulentic, independent lead director of the Staples board, in a statement. “With the termination of the merger, we mutually agreed that now is the right time to transition to new management to lead Staples through its next phase of growth.”

The company has been challenged with declining sales in the face of online competition, and its shares fell 47% in the past year. After the failed Office Depot merger, it announced new strategies, including $300 million in cost reductions and a possible sale of its European business.

In March, the company announced a 6% decrease in total company sales for 2015, while fourth-quarter sales fell by 7% compared to 2014’s fourth quarter. At the time, though, the company said that its promotional products division was a bright spot. In fact, Sargent reported on a conference call that the promotional products business achieved double-digit growth in the fourth quarter.

Counselor ranks Staples Promotional Products as the number-one company on its annual Top 40 list of the largest distributors in the industry, with estimated North American promotional products revenue of more than $550 million.