Inside This Issue - News
Changes at Big Lots
September 3rd, 2012
COLUMBUS, Ohio – Big Lots Inc. has shaken up its senior management ranks after reporting disappointing quarterly results and lowering its earnings guidance for the second time.
The nation’s largest closeout retailer reported a 38.1% drop in income from continuing operations to $22.1 million, or 36 cents per diluted share, for the second quarter. Analysts surveyed by Thomson Reuters had expected 41 cents per diluted share, on average. Sales rose 4% to $1.22 billion, short of the $1.24 billion projected by analysts.
As a result of the performance, management lowered its full-year adjusted profit prediction to a range of $2.80 to $2.95 per share, down from a prior forecast of $3.25 to $3.40 per share. Analysts had been looking for $3.29 per share, on average.
During a conference call with analysts, chairman, president and chief executive officer Steve Fishman explained that the chain’s discretionary business, which encompasses furniture, home and seasonal, softened in the second quarter. He added that management expects some of those categories to remain challenged in the near term.
"Our business needs to be constantly evolving," he said. "I’ve said this on many occasions: Our model is different. When we’re not changing in merchandising and driving it all the way to the store and, ultimately, the customer, we fall behind."
Against that background, the company’s executive vice president of merchandising, Douglas Wurl, has resigned. Succeeding him is John Martin, who has been promoted to executive vice president and chief merchandising officer, with responsibility not only for merchandising but for global sourcing and marketing as well. Martin originally joined Big Lots in 2003 as EVP of merchandising but in April 2011 took the position of EVP of administration.
In addition, Lisa Bachmann has been elevated to executive vice president and chief operating officer. While taking on responsibility for store operations, she retains oversight of merchandise planning and allocation, information technology, and distribution and transportation services as well. Moreover, she continues to serve as the company’s chief information officer.
Bachmann joined the chain in 2002 as senior vice president of merchandise planning/allocation, and added the role of chief information officer in 2005. She was promoted to executive vice president in 2010 and assumed responsibility for distribution and transportation services at that time.
In other moves, Charles Haubiel II has been promoted to executive vice president and chief administrative officer. In his new role, Haubiel will lead the human resources and loss prevention departments while retaining responsibility for the legal and real estate departments and continuing to serve as general counsel and corporate secretary. Haubiel joined Big Lots in 1997 and was promoted to vice president, general counsel and corporate secretary in 2000. He became senior vice president in 2004 and added responsibility for real estate in 2008. He was promoted to EVP in 2010.
Reporting to Haubiel is Michael Schlonsky, who has been elevated to the position of senior vice president of human resources. He had been vice president of associate relations and benefits.
Finally, Timothy Johnson has been promoted to senior vice president and chief financial officer, following promotions to the position of SVP of finance in July 2011. Johnson joined the company in 2000 as director of strategic planning and was moved up to vice president of strategic planning and investor relations in 2004. His new position entails responsibility for treasury and risk management as well as all of the company’s financial activities.
Martin, Bachmann, Haubiel and Johnson all report to Fishman.
Fishman told analysts that, in addition to the executive changes, the chain will initiate several in-store tests, including installation of coolers and freezers, acceptance of food stamps, a new loyalty program, and full store remodels intended to provide a “like new” in-store experience.