Industry Updates: Discount and Specialty Stores – August 2015
99 Cents Only continued its ongoing senior leadership transformation. The retailer had placed a former Kmart executive in the role of interim CEO and now the company has named a former Walmart executive as interim CFO for the second time. Less than a month after Andy Giancamilli was named interim President and CEO, 99 Cents Only named Michael Fung to the role of interim CFO and Treasurer. Both men served on the company’s board of directors with Giancamilli in the role as Chairman. Fung previously filled the interim CFO role from January to September 2013 and he joined the 99 Cents Only board in December 2013. He fills a position vacated by Bradley Lukow who resigned as CFO of the company. Fung spent a decade in senior finance roles at Walmart, including serving as CFO of Walmart’s U.S. operations from 2006 until 2012. The resignation of Lukow and Fung’s second stint as interim CFO follows the May 26 resignation of Stephane Gonthier from his position as CEO and the appointment of Giancamilli as interim CEO.
99 Cents Only has named Jack Sinclair Chief Merchandising Officer at in a move that signals the retailer’s growth aspirations. Sinclair left Walmart earlier this year as part of large senior leadership change but not until after he had spent seven years leading Walmart’s U.S. grocery business as Exec VP Merchandising. As per the note above, Sinclair is the second former Walmart executive to be named to a key role 99 Cents Only in the past month. Earlier the retailer named Michael Fung interim CFO and Treasurer. Fung and Sinclair worked together at Walmart where Fung served as CFO of the Walmart U.S. division from 2006 until 2012.
Barnes & Noble is hoping that hiring a CEO with experience launching electronics products will help revive its Nook e-reader division. The retailer has named Ronald D. Boire, now former President and CEO of Sears Canada Inc., to become the CEO of its new retail division. Boire’s 25-year executive career includes extensive experience in developing and launching consumer electronics. As previously announced, Barnes & Noble is separating its college and retail businesses into two public companies. Once the spinoff is completed, expected by the end of August, Boire will become the CEO of Barnes & Noble Inc., which will include the retail and Nook units, and current CEO Michael Huseby will become Executive Chairman of the college-bookstore unit.
Barnes & Noble Inc. has hired a new chief for its digital division as the retailer rethinks the leadership of its Nook business. The retailer has named Frederic D. Argir as VP and Chief Digital Officer overseeing the e-commerce and Nook businesses, which are part of the retail division. Argir joins Barnes & Noble from Toys ‘R Us Inc., where he also served as Chief Digital Officer.
Barnes & Noble announced that Mahesh Veerina, President of the Nook Consumer Business, will leave the company Feb. 1, 2016.
Conn’s has named Thomas Moran CFO. He replaces Mark Haley, Conn’s Chief Accounting Officer, who had filled the position on an interim basis since last December.
Dollar General announced that a familiar face has returned to lead the company’s merchandising organization following the departure of David D’Arezzo, who left the retailer after serving as Chief Merchandising Officer for 20 months. Dollar General stated that James W. “Jim” Thorpe had rejoined the company as Exec VP and Chief Merchandising Officer. Thorpe previously served as Dollar General’s Senior VP and GMM from May 2006 until he retired in July 2012. The changeover in senior leadership comes just two months after Todd Vasos was named CEO after previously serving as COO. Thorpe’s appointment follows another key senior leadership move in June, which saw Jeff Owen rejoin Dollar General in the role of Exec VP Operations and the departure of Greg Sparks as Exec VP Store Operations. Owen had spent 20 years at Dollar General before leaving the company in July 2014. The return of Thorpe and Owen follow the appointment of Vasos to the CEO role on June 3. Vasos had previously served as COO under the tenure of former CEO Rick Dreiling who stepped down but will remain as Chairman until the end of the fiscal year on Jan. 29, 2016.
Dollar Tree, Inc. announced that upon completion of the company’s acquisition of Family Dollar and the promotion of Dollar Tree President and COO, Gary Philbin to that same executive position at Family Dollar, the company has appointed Family Dollar CEO Howard Levine to its board of directors.
Dollar Tree, Inc. announced that Michael Witynski has been named COO. As Chief Operating Officer, Mr. Witynski will be responsible for store operations and real estate for Dollar Tree bannered stores in the U.S. and all retail operations and real estate in Canada. Mr. Witynski has served as Senior Vice President of Stores since joining Dollar Tree in 2010. Mr. Witynski will report to Bob Sasser, Chief Executive Officer.
Jo-Ann Fabric and Craft Stores has announced two significant organizational changes in the merchandising and marketing areas. Megan Featherston, formerly Senior VP Merchandising, at Jo-Ann, has been promoted to Executive VP Merchandising & Marketing. In her new role, she will oversee the retailer’s merchandising, marketing, Joann.com and business intelligence and analytics teams. In addition to Featherston’s promotion, the company said it hired Amy Parker as Senior VP Marketing & Advertising.
The Pep Boys – Manny, Moe & Jack announced the installation of Scott P. Sider as its new CEO. Mr. Sider was also appointed to the Board of Directors. In connection with Mr. Sider’s appointment, John Sweetwood, who had been serving as Interim CEO since the departure of former CEO Mike Odell, who stepped down last September after seven years with the company, has resumed his position as an independent Board member.
Petco is making several changes to its leadership team as the retailer focuses on key omnichannel initiatives. The pet specialty retailer announced that CEO Jim Myers will also be taking on the role of Chairman, Brad Weston has been named President, Steve Lossing has been named Senior VP of Operations, and Rebecca Frechette has been named Senior VP of Merchandising.
PetSmart, Inc. announced that Bruce K. Thorn, Executive VP, Store Operations, Services and Supply Chain since April 2014, has left the company. Mr. Thorn has been named Executive VP, COO at Men’s Wearhouse.
QVC announced the appointment of Sanjay Singh as Senior VP to lead its newly formed Business Planning & Analysis (BP&A) group.
Staples Inc. announced that its former head merchant, Executive VP of Global Merchandising Mike Edwards, has left the company to be named President and CEO of eBags Inc.
Target announced the latest executive personnel move by new CEO Brian Cornell to reshape the company and return the retailer to its roots and be recognized again as the purveyor of ‘cheap chic’. The discounter said that its Chief Merchandising and Supply Chain Officer is exiting from her post. The retailer announced that Kathlee Tesija, who also served as Exec VP will move temporarily to a strategic adviser post and plans to leave the company in April 2016. Ms. Tesija, first joined the company in 1986.
Target’s now former Senior VP of Stores, Bryan Everett, has been named Exec VP Store Operations for Rite Aid after leaving Target.
Target announced that VP Digital and Marketing Technologies and Services Platforms, Pawan Verma, has left the retailer to join Foot Locker Inc. as its a new IT chief, to drive the company’s next generation of technological advances.
Target announced that Mike Robbins, now its former Senior VP, Global Supply Chain has left the company to accept a position with J.C. Penney as Senior Vice President of Supply Chain.
Tuesday Morning Corporation announced that Jeffrey N. Boyer, Exec VP, Chief Administrative Officer and Chief Financial Officer, has resigned his position in to pursue other professional opportunities. Mr. Boyer accepted as similar position with Pier 1 Imports. Tuesday Morning has commenced a comprehensive search for Mr. Boyer’s replacement with the assistance of an executive search firm. Tuesday Morning currently anticipates that, following Mr. Boyer’s departure, its Vice President and Controller, Kelly Munsch, will be responsible for the Company’s accounting and finance functions on an interim basis until Mr. Boyer’s replacement is appointed.
Barnes & Noble, Inc. reported sales for its fiscal 2015 full-year ended May 2, 2015. For fiscal 2015, consolidated revenues decreased 4.9% to $6.1 billion versus the prior year.
Ollie’s Bargain Outlet raised $143 million in a wildly successful initial public stock offering that positions the company for steady expansion of its 183 unit store base beyond core markets. The company is now traded on Nasdaq under OLLI.
Mergers and Acquisitions
Dollar Tree Inc. announced that it has completed its $8.5 billion acquisition of Family Dollar Stores Inc. Dollar Tree also named a new president and COO of Family Dollar. The combined company will operate about 13,000 stores, making it the largest dollar store chain in the U.S. by store count. Under the terms of the merger agreement first announced and unanimously approved by each company’s Board of Directors in July 2014. The company also announced that Gary Philbin has been named President and COO of Family Dollar. In his new role, Philbin will continue to report to Bob Sasser. Philbin joined Dollar Tree as Senior VP of Stores in December 2001, and was later promoted to COO in March 2007 and to President in June 2013.
Kriser’s Natural Pet store is expanding in the Chicago area as the retailer looks to leverage what has become a $58 billion industry. Kriser’s is bringing the natural pet movement to the west suburbs of Chicago with a grand opening in Naperville on Aug. 15-16, in the Naperville Plaza, across from Trader Joe’s. A second grand opening will take place in Northbrook on Aug. 29-30. With these openings the retailer will operate 30 locations.
Marbles: The Brain Store has opened three new stores in three new states thus summer. The retailer plans to open 50 new stores over the next three years.
Meijer has moved into its sixth state, opening its first Wisconsin supercenters. The stores come in at 192,000-sq.-ft. per location. In addition to the retailer’s grocery, merchandise and garden center at each store, the new pharmacies offer drive-thru pick up and the Meijer free prescription program.
Ollie’s Bargain Outlet Ollie’s co-founder and CEO Mark Butler noted that although the company has identified 950 suitable store locations, proceeds from its IPO will be used to repay debt and the company will maintain a measured pace of expansion.
Office Depot boosted its 2015 store closing target to 175 locations with another 60 due to close in 2016. Those closings are on top of 153 closing throughout 2014, including 108 stores in the fourth quarter of last year.
TargetExpress, which comprises only about 16,000 square feet, will open in the St. Paul metro area this month. The Highland Park store will feature a pharmacy and cater to a community of families, empty nesters and college students, the Grand Forks Herald reports. The store will contain an organics section, the first of its kind at a TargetExpress, in addition to other wellness-oriented items, like water bottles, yoga mats and kosher items. It will also include two clothing aisles, sporting goods, small electronics, school supplies, a small selection of home décor, cleaning supplies and jewelry. Target’s smallest store, another TargetExpress, is located in San Francisco and covers 12,000 square feet. Target is embracing the small store model in order to reach more customers in urban areas.
Target announced that it plans to change the names of 14 stores currently operating as CityTarget and TargetExpress to simply Target. The change is expected to happen this October when Target also plans to open four smaller format stores and two conventional stores. Target is now beginning to eliminate the multiple nameplates under which the company operates various store types, feeling all Targets are basically Target stores. The company did not elaborate on plans for the several hundred stores it operates under the Super Target banner, which offer a full assortment of groceries and fresh food.
Target has become one of the largest retailers to enhance the in-store shopping experience while simultaneously bridging its physical and online experiences with new technology.
The retailer announced that it has rolled out a beacon test program in 50 stores across the U.S. Guests who opt in will receive location-based coupons, deals and product recommendations on their iPhones as they browse the aisles. The program is designed to save guests time and money by helping them find what they’re looking for, discover new products and receive offers and services that are relevant and timely.
Whether it’s a simple welcome message, a coupon or a promotion, retailers are increasingly trying to engage customers by communicating with them via their downloaded apps, their location and even their digital shopping lists. Target joins Macy’s, Walmart, GameStop and others experimenting with beacons. Targeted marketing using geolocation isn’t brand new, but what makes beacon technology special is the ability to “wake up” an app a consumer has downloaded, but that isn’t open on the device.
Target says it is already working to develop additional features for future release, including the ability to dynamically re-sort shopping lists as shoppers move through the store, like how smartphone maps re-route when you veer off course.
Target also plans to launch a service in the Target app in which shoppers can request the help of a store team member right from their phones.
The retailer says the technology is not available for Android devices yet, and that it plans to expand the service to more stores later this year.