ARCADIA, Calif. -- Two American Stores executives -- Lawrence Del Santo and Richard Goodspeed -- were named last week to top positions at Vons Cos. here. The move sets up the long-awaited succession plan for Vons' Chairman Roger Stangeland.
Del Santo, 60, became Vons' vice chairman and chief executive officer and a member of the board of directors, returning to the company at which he was president from 1970 to 1974. The position of vice chairman is new. Goodspeed, 57, was named president and chief operating officer, posts that were vacant. The two executives will be responsible for day-to-day operations and the future direction of the company, according to a Vons statement.
Stangeland, who has been chairman and chief executive officer, will relinquish the chairman position at the annual meeting in May 1995, when Del Santo will be given that title. However, Stangeland, who turns 65 in October of 1994, said he will begin to reduce his workload at the end of this calendar year. He also will complete his term as chairman of the Food Marketing Institute. At American Stores, Robert Hermanns, 50, has been named to succeed Del Santo, who was senior executive vice president of food. Hermanns was most recently American's executive vice president and general manager for new business development, a position that hasn't yet been filled, a spokeswoman said. The company will not name a successor for Goodspeed's position, which was executive vice president of food operations, according to the spokeswoman.
Hermanns will have overall responsibility for the performance and results of food store operations. Reporting to him are the general managers of each of the company's six food retail organizations. Hermanns reports to Victor Lund, American's president and chief executive officer.
Observers said the executive changes will result in a clearer strategic direction for Vons as it seeks to achieve a turnaround from sales declines resulting from the slumping southern California economy. Conversely, observers said the moves represent something of a setback for American Stores as it attempts to become more of an operating company.
Debra Levin, an analyst at Morgan Stanley, New York, said she was told Del Santo made the change for two reasons: he welcomed the opportunity to lead a turnaround at Vons, and he didn't want to relocate from California to American Stores' headquarters in Salt Lake City, a move that was increasingly necessary in the wake of his promotion to his senior executive title XXXXXXX. Del Santo couldn't be reached for comment.
Del Santo began his career at Vons in 1957, and after his stint as Vons president became executive vice-president of the store's then parent company, Household Merchandising. In 1984 he joined Lucky Stores, which was acquired by American Stores in XXXXXX. Goodspeed began his career with Lucky Stores in 1956 and held numerous senior management positions, including president of the Kash n' Karry division, president of the northern California division and president of Lucky Stores. Hermanns, who has more than 30 years experience in the supermarket industry, has been with American Stores and its operating subsidiaries for most of his career. In his most recent position, he was responsible for the development of alternative-store formats and operations. Previously, he was executive vice-president and general manager for the southern California division of Lucky Stores. In a prepared statement, Stangeland said Del Santo and Goodspeed "bring a great depth of experience, skill and ability as well as a big picture perspective and practical approach that is needed for the CEO and COO of the company going forward."
Stangeland will now focus his attentions on the transition process, corporate governance issues, investor relations, and certain real estate and litigation matters, the statement said.
In a statement from American, Lund said, "There is no one better in the supermarket industry than Bob Hermanns to lead American Stores Co.'s grocery operations. Bob's outstanding retail management skills will ensure a seamless transition for the company and our associates."
In other moves announced shortly before these top-level changes, Vons expanded the responsibilities of two executive vice presidents, Robert Kelly and Peter Horn. Kelly has been named executive vice president of retailing, a new position. Horn has been named executive vice president of retail support services, also a new position. Kelly was executive vice president of procurement and marketing. Horn was executive vice president of store operations. Each executive absorbs some former duties held by Neill Crowley, executive vice president of store support, who left the company. Analysts were optimistic that Vons will now have a shot at a reversal of fortune. "Vons is in desperate need of a turnaround, and now we know who the CEO is and have a good guess as to strategy," said Ed Comeau, an analyst for Lehman Brothers, New York. "I'm sure there will be some other new faces, so it's a new era for them."
Comeau added that American will have big challenges ahead following the loss of the two executives.
"It's obviously a setback for American Stores because they had begun to make determined moves in changing from a holding company into an operating company," Comeau said. "Bob Hermanns will do a good job, but it will be tough to fill Larry's shoes."
Levin said that American will be able to move beyond this point.
"American isn't a one-person operation, and I suspect they have sufficient management depth," she said. "Larry Del Santo is very talented and capable, so it's definitely a loss, but they have enough depth to continue the momentum to improve their operations."