Sales will continue to serve as chairman of the board. Director Philip L. Francis has been elected lead director.
Herkert (left) had been Supervalu’s CEO since May of 2009, but the former Wal-Mart executive was unable to stop sales declines, and Supervalu's earnings and its share price collapsed. Earlier this month Herkert said that the company would explore strategic options including a sale. In the meantime, he ordered $250 million in expense cuts over the next two years and said near-term profits would suffer as the company invested in price.
Sales in a memo to Supervalu employees Monday morning said he would draw on his experience turning around Canadian Tire, the general merchandise retailer where he was CEO from 2000 to 2006. He said he would take immediate steps to improve sales and cut costs at Supervalu, while improving relationships with independent customers and licensees of its Save-A-Lot discount division.
“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. “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.
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"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.”
Sales, 62, joined Supervalu’s board in 2006 and has been its non-executive chairman since 2010. He is the retired vice chairman and former CEO of Canadian Tire, where he led the development and implementation of the company’s first enterprise strategic plan, which included the creation of transformational strategies for the company’s retail, financial services and petroleum and parts divisions and the acquisition of Mark’s Work Warehouse. Sales also leveraged Canadian Tire’s unique value proposition to reposition the corporation in the face of entry of key U.S. competitors, reviving sales and earnings.
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Susan E. Engel, chair of Supervlu’s leadership development and compensation committee said, “We are grateful to Wayne for taking on the chief executive position at this important juncture in Supervalu 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.”
Prior to joining Canadian Tire in 1991, Sales served in several senior leadership positions with the U.S. division of Kmart in the areas of marketing, merchandising and store operations. Given his intention to focus full attention on his new role at Supervalu, Sales said he would retire from his board positions with Georgia Gulf Corp. and Discovery Air.
Francis, the retired executive chairman of PetSmart, has been a Supervalu director since 2006. He is also a former president and chief executive officer of Shaw’s Supermarkets.
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