Retail News Breaks
Supervalu fires Herkert, names Sales as CEO
July 30th, 2012
MINNEAPOLIS – Struggling supermarket retailer Supervalu Inc. has appointed chairman Wayne Sales as chief executive officer, replacing Craig Herkert.
Supervalu said Monday that Sales, 62, will continue to serve as chairman and that board member Philip Francis has been elected lead director.
"In my new role, I will work closely with our leadership team to improve our sales and earnings trajectory and generate long-term shareholder value, focusing relentlessly on identifying factors that will drive meaningful improvements in our strategy execution and overall performance," Sales said in a statement.
The leadership change comes a couple of weeks after Supervalu, the nation's third-largest supermarket operator, reported poor sales and earnings results for its fiscal 2013 first quarter ended June 16.
The company also unveiled an action plan to spur customer traffic, offer more competitive pricing and promotions, and pare costs. In addition, the company suspended its dividend and announced plans to accelerate debt reduction, refinance debt and scale back capital expenditures.
"We will take significant cost out of the business and move with urgency in our retail food business to lower prices and create points of sustainable differentiation for our customers," Sales stated Monday. "We will work closely and collaboratively with independent retailers to ensure that they continue to receive the superior service they need to increase sales and profitability. We will strengthen our engagement with our Save-A-Lot licensees — leveraging their expertise, enhancing our collective performance and ensuring our ability to grow a nationwide network of hard discount stores. As we execute our business plan, the board will continue its review of strategic alternatives, and I am still leading that process.”
Herkert joined Supervalu as CEO in May 2009 from Walmart, where he was president and CEO of the Americas unit since 2004. He took the chief executive reins from Jeff Noddle, who remained chairman until June 2010, when he retired.
"On behalf of the entire board, I would like to thank Craig for his efforts and wish him well as he pursues new opportunities," Sales commented.
A Supervalu director since 2006 and nonexecutive chairman since 2010, Sales is the retired vice chairman of Canadian Tire Corp., a leading general-merchandise chain in Canada. He served as Canadian Tire's president and CEO from 2000 to 2006, during which time he helped revitalize the chain, Supervalu noted. Sales’ retail executive experience spans more than 35 years. Before joining Canadian Tire in 1991, he served in several senior leadership positions with the U.S. division of Kmart Corp. in the areas of marketing, merchandising and store operations.
"We are grateful to Wayne for taking on the chief executive position at this important juncture in Supervalu's history. He has been a valued member of the Supervalu board, bringing a wealth of executive experience from an extremely successful career in business and retailing and a strong track record of transforming businesses and driving profitable growth," stated Susan Engel, chair of the Supervalu board's leadership development and compensation committee.
Francis, 65, also holds extensive retail industry experience. A Supervalu director since 2006, he is the retired executive chairman of PetSmart Inc., where he was CEO from 1999 to 2009. Before PetSmart, Francis was the president and CEO of Shaw's Supermarkets, a Supervalu chain.
Overall, Supervalu has 2,437 stores, including 1,101 traditional supermarkerts (798 with pharmacies) and 1,336 Save-A-Lot hard discount stores. Its wholesale business serves 1,950 independent supermarkets.
Supervalu's total sales for fiscal 2012 ended Feb. 25 were $36.1 billion, down 3.8% year over year.
"Craig [Herkert] took the helm during a time of great challenge for Supervalu, and I want to thank him for his service over the past three years," Sales said in an e-mail message to employees about the leadership change.
"Many of our customers and investors have lost confidence and patience with Supervalu; I know some of you may have as well," he added. "I am excited to be part of the team, and you have my personal commitment to do everything I can to ensure our future."
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