Eric Claus — a “street fighter” with a flair for merchandising and a track record of success with discounters in Canada — is getting a second chance at the head of a U.S. retailer.
Supervalu on Wednesday named Claus as CEO of its discount Save-A-Lot chain, replacing Ritchie Casteel, who will report to Claus as president when Claus takes the role on or before Jan. 4. The change assures a new leader with public company experience will be at the helm if Supervalu proceeds with plans for a public spinoff of Save-A-Lot as anticipated.
Claus from 2005 to 2009 served as CEO of A&P, a tumultuous period during which the company acquired rival Pathmark Stores — an event leading to Claus’ own removal from A&P and ultimately, to two rounds in Chapter 11 bankruptcy and the wind-down of the venerable supermarket brand.
Sources however tended to paint Claus as a victim of the Pathmark debacle and not its cause. The 2007 Pathmark deal, engineered by A&P’s executive chairman Christian Haub and Ron Burkle’s Yucaipa Group, Pathmark’s owners — resulted in a combined company with oversight from both groups. Internal maneuverings amid a rocky integration led to Claus’ dismissal and a revolving door of leaders that eventually left Burkle’s group in control.
As one analyst told SN when Claus left A&P in 2009, “the question is, did Eric create a problem, or did he inherit a problem. As a CEO, he has to be responsible for the end result, but I'd argue he inherited a problem.”
Until the Pathmark issues brought A&P down, Claus was one of the beleaguered company’s leading lights. His work as CEO of its Canadian division — namely the establishment of Food Basics as a leading Canadian discounter — helped its parent realize $1.5 billion in a 2005 sale to Metro Inc. Claus then got the chance to spend that money as A&P’s CEO, heading up a promising strategy to renew conventional stores behind a fresh format, and flip others to a revamped Food Basics discount model imported from Canada.
Prior to A&P, Claus led a collection of independent retailers with Co-op Atlantic, helping that company go toe-to-toe with better funded competitors Loblaw and Sobeys. “You could describe Eric as a street fighter,” one analyst told SN in a 2007 profile. “His attitude was, ‘You don't take a back seat when you're No. 2 or No. 3.’”
Following his dismissal from A&P, Claus co-founded an offbeat home décor retailer known as Oddjects, and joined Red Apple Stores in 2013.
According to a source in Canada who asked not to be identified, Red Apple Stores “were a mess” when Claus was appointed by the company’s private-equity owners in 2013. By shedding unprofitable stores and revitalizing others behind a unified brand and cleaner stores, Claus affected a turnaround at Red Apple, a chain of 155 discount apparel stores located mainly in small towns.
Claus also serves on the board of Canadian hardware and home improvement retailer Rona, itself realizing the benefits of a recent turnaround amid expansion of competitors like Home Depot and Lowe’s.
“I don’t think he gets the job at Save-A-Lot without the work he did at Red Apple,” the source said. “That was near bankruptcy situation, and a great turnaround.”
Claus is joining Save-A-Lot as it prepares to enter the public markets as a growth company — and after work under Casteel and Supervalu CEO Sam Duncan helped to stabilize the once-struggling retailer. Casteel, a 30-year veteran of Albertsons, was appointed CEO in 2013.
“[Claus] needs to keep improving on the work that Sam Duncan, Ritchie Casteel and the Supervalu leadership team did to right the business,” Chuck Cerankosky, an analyst at Northcoast Research, told SN. “It’s a challenging environment out there, but he’ll have the chance to expand, and increase the pace of growth.”
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