Industry Updates: Discount and Specialty Stores – December 2015
99 Cents Only appointed Felicia Thornton as CFO, Treasurer, responsible for overseeing Finance, Accounting, Treasury, Risk Management, Legal and IT functions. The new CFO has extensive executive experience in retail, and particularly in the grocery store industry, having served in senior leadership positions at DSM, Inc., Albertsons, and The Kroger Company.
Advance Auto Parts announced that CEO Darren R. Jackson is retiring effective January 2nd, 2016 and will be replaced by interim CEO George Sherman, who will also retain his position as president of the company. Also, the company named Starboard Value LP CEO Jeffrey C. Smith to its board of directors, expanding the board to 13 members.
Barnes & Noble announced the appointment of William E. Wood as CIO. Mr. Wood joins Barnes & Noble from EZCORP, Inc. where he also served as CIO. He will report directly to Ron Boire, CEO effective December 14th.
BJ’s Wholesale Club announced that Christopher J. Baldwin, BJ’s President, COO, has been named President, CEO, succeeding Laura J. Sen, who is assuming the role of Non-Executive Chairman. The appointment is effective February 1, 2016.
Dollar General Corp. has named John W. Garratt to Exec VP and CFO effective December 2nd, 2015. Garratt has served as Dollar General’s interim CFO since June 2015 and previously served as its Senior VP Finance and Strategy since joining the Company in October 2014.
Dollar General Corp. has announced Anita C. Elliott will have the added title of Chief Accounting Officer. Elliott has served as Senior VP and Controller at Dollar General since December 2005.
Ollie’s Bargain Outlet Holdings Inc. has named Jay Stasz to the newly created position of Senior VP Finance and Chief Accounting Officer. Stasz will report to John Swygert, Ollie’s Bargain Outlet Exec VP and CFO. Stasz comes to Ollie’s Bargain Outlet following 17 years with Sports Authority, where he held several positions.
RadioShack named Nick Cannon as Chief Creative Officer. RadioShack’s hope is that Cannon will help with “innovating in the consumer electronics space and particularly the space that empowers young people,” RadioShack Chief Marketing Officer Michael Tatelman told USA TODAY. Tatelman declined to discuss Cannon’s compensation. Cannon will work with RadioShack to develop exclusive products and advance the company’s education and STEM (science, technology, engineering, math) initiatives. He is also slated to put on events and performances, as well as curate playlists for the company’s 1,733 stores.
Tuesday Morning announced that Steven R. Becker has been named CEO, effective immediately. Becker has led Tuesday Morning’s Office of the Chairman since Sept. 8, 2015 when the previous CEO, Michael Rouleau, announced his retirement. Previously, Becker had served as the company’s chairman of the board since 2012.
Walmart named George Riedl as Senior VP, President of Walmart health and wellness. He succeeds Labeed Diab, who left Walmart to join Brookdale Senior Living Inc. as COO. Riedl most recently was president of Advanced Marketing & Sales Inc., an independent sales, marketing and consulting agency focused on assisting consumer packaged goods companies. He was responsible for sales, marketing strategy and operations. Riedl also spent 27 years at Walgreens,
Walmart announced the retirement of Stephen Quinn Chief Marketing Officer as of January 31st, 2016. Quinn, a former Frito-Lay executive who joined Walmart in 2005, has served as CMO of Walmart U.S. since 2007. His departure continues a reshuffling of top executive talent at Walmart that began under CEO Doug McMillon, who took office in early 2014, and U.S. CEO Greg Foran, who joined later that year.
Walmart has hired Michael Francis as a Marketing Consultant as of January 1st, 2016. Francis, who is credited for forging the successful “cheap-chic” image over a 27-year career at Target, is expected to oversee a revamp of the Walmart’s marketing, according to a report in the Wall Street Journal, which first reported on Quinn’s impending departure. Francis will join Walmart January 1st, 2016. Francis, who is currently serving in a role with DreamWorks animation, spent 27 years with Minneapolis-based Target before leaving for JC Penney. Target is now run by CEO Brian Cornell, who spent several years with Walmart’s Sam’s Club division.
Williams-Sonoma Founder and Vice Chairman Charles E. “Chuck” Williams passed away at age 100 from natural causes, the company announced.
Barnes & Noble’s new CEO Ron Boire, wants to transform the chain into a “lifestyle brand” by expanding the selection of toys, games, gadgets and other gifts that are offered at this time, according to a report in The New York Times. The newspaper quoted Boire as saying that “Everything we do around learning, personal growth and development fits our brand. There’s a lot of opportunity.”
Best Buy said it expects weak demand for consumer electronics in the fourth quarter and forecast flat same store sales at domestic locations following a 0.5% third quarter company increase that was aided by an 18% online increase. The tepid outlook came amid the release of financial results for the period ended October 31, 2015 that actually exceeded analysts’ estimates. The total revenues declined to $8.8 billion from $9 billion while the net income increased to $125 million, or 36 cents a share, from $107 million, or 30 cents a share. On an adjusted basis, earnings per share were 41 cents, six cents better than analysts’ consensus estimate.
Dollar General Corp. The company said it expects to begin shipments in February 2016 from their new distribution facility in San Antonio, TX; the company has already begun construction on a new distribution facility in Janesville, WI, this will make the 14th distribution center for Dollar General.
Field & Stream the specialty outdoor goods chain has launched its first-ever e-commerce website, the Field & Stream chain is a 19-store banner of Dick’s Sporting Goods. To further enhance Dick’s Sporting Goods omnichannel capabilities. FieldandStreamShop.com is the second e-commerce site Dick’s Sporting Goods operates in-house, the company also operates GolfGalaxy.com e-commerce site for its specialty Golf Galaxy banner.
Restoration Hardware is entering the fashion business. Gary Friedman Restoration Hardware’s Chairman and CEO wants to give consumers a full Restoration Hardware experience. There’s a Restoration Hardware restaurant — the first of many — and a guest house is in the works. Apparel is an inevitable part of Friedman’s strategy to create a complete Restoration Hardware lifestyle, inspired by Ralph Lauren, whom Friedman studied closely and admires for “presenting his image and brand in such a complete way.” Apparel, the last piece of the lifestyle puzzle, is close at hand. The focus will be on luxury apparel, accessories, footwear and jewelry; no launch date has been set.
Target began contacting its Pharmacy Rewards members to informing them that the company was ending the rewards program because CVS Health will bring its own program when it replaces the pharmacies in Target stores as part of a deal between the two companies announced this summer. On the Target Pharmacy Rewards website, the company notes that customers can no longer enroll in the program, nor will they be able to view their account or accumulate credit toward a 5% discount certificate. Target noted that Pharmacy Rewards customers would be receiving a 5%-off coupon in the mail as a gesture of thanks.
Trans World Entertainment Corp. which operates the F.Y.E. chain of retail entertainment stores, appears poised to start reaping the benefits of its transformation under Mike Feurer the new CEO. Feurer was hired a year ago, taking the top job long held by founder Robert Higgins, and has been quickly helping to transform the F.Y.E. chain from music and video stores to a pop culture shopping destination, where you are just as likely to find “ugly” holiday sweaters and comic books on the shelves as CDs and DVDs. To support that move, the company has been renovating stores and opening new ones with a new design, even as it closes some stores that don’t align with its strategy. During the third quarter, Trans World opened two new stores and remodeled two others with the new design and format. During the fourth quarter, the company will open four more stores and remodel two more, bringing the total of the new format stores 10 by the end of the year.
The FTC (Federal Trade Commission) has filed suit to block the $6.3 billion merger of Staples and Office Depot. The FTC says the deal would hurt competition in the market for office supplies sold to large corporations. The companies plan to contest the FTC decision, stating that the merger would benefit customers and shareholders. An administrative trial will begin on the FTC’s complaint on May 10, 2016.
Walmart on December 10, 2015 began rolling out Walmart Pay, making it the first retailer with their own mobile payments solution that works on any Apple iOS or Android smartphone.
“Walmart Pay is not about improving payment for just payment’s sake,” Daniel Eckert, Walmart U.S. Senior VP Services, said during a webcast media briefing. “It’s about how we can use payment to create a better shopping experience.” Walmart Pay, which will be available in all stores by summer 2016, uses a camera that reads a code that appears on cash registers at the end of a transaction to enable payment. Credit card information not stored on the app but rather on walmart.com. The goal is to make checkout easier, Eckert said. Walmart has been adding self-checkout kiosks at some stores and increasing cash register staffing to speed up the checkout process, which had for years been a concern of many Walmart customers and a big drag on its customer service ratings.
Walmart is keeping a door open to other systems down the line: Walmart Pay is designed so it can work with other digital wallets, including potentially Apple Pay and Google Wallet, if the retailer wants. And Eckert insisted the launch did not mean Walmart was wavering in its commitment to MCX. “Walmart Pay makes the app more valuable to the customers and helps us build a deeper relationship with them,” said Neil Ashe, Walmart CEO Global E-Commerce.
Target is ‘transitioning from grocery to food.’ Target’s CEO Brian Cornell is initiating changes in the chain’s food assortment to appeal to Millennial tastes, with an emphasis on natural, healthy and good-for-you items.
Mergers and Acquisitions
Petco released a statement that the company will be acquired with funds affiliated with CVC Capital Partners and the Canada Pension Plan Investment Board (CPPIB); who have entered into a definitive agreement to jointly acquire Petco from a group of investors led by TPG and Leonard Green & Partners for approximately $4.6 billion. The acquisition of the 1,400 store retailer is expected to close in early 2016.
The Pep Boys – Manny, Moe & Jack has accepted Bridgestone Americas new buyout offer. Pep Boys had previously agreed to a deal from Nashville-based Bridgestone Americas for $15 a share. On Monday the 7th, however, activist investor Carl Icahn made an offer of $15.50 a share. Pep Boys declared Icahn’s offer “superior,” and gave Bridgestone until 4 p.m. December 11th to sweeten its offer. Late on Friday December 11th, the two companies announced that Bridgestone had matched Icahn’s offer, and that the amended terms had been agreed to by Pep Boys. According to a news release from the companies, the new offer values the deal at $863 million, or about $28 million more than Bridgestone’s original offer. The deal would add about 800 Pep Boys locations to Bridgestone Retail Operations’ network of 2,200 service centers. Bridgestone is currently building its new headquarters in downtown Nashville, where it expects to house some 1,700 employees.
Dollar General Corp. said it plans to increase square-footage growth 7% next year after boosting growth 6% this year. The company is also anticipating opening 900 new stores in with 730 this year — in a combination of urban, suburban and rural locations.
Target will open a location in one of lower Manhattan’s trendiest and wealthiest neighborhoods, on Greenwich Street in Tribeca, near Battery Park, a fast-growing and affluent residential area, and the Financial District. The location will be approximately 45,000 sq. ft. The two-level store is scheduled to open in October 2016.
Target will be closing 13 stores on 1/30/2016 one in each of the following city/states, Austin, Texas, Odessa, Florida, Casa Grande, Arizona, Victorville, California, Flint, Michigan, Columbus, Ohio, Milwaukee, Wisconsin, Superior, Wisconsin, Springfield, Ohio, New Ulm, Minnesota, Ottumwa, Iowa, Anderson, Indiana and Louisville, Kentucky.