Sprouts Farmers Market has named former Walmart grocery executive Jack Sinclair (left) as chief executive officer, filling a leadership vacancy arising from the exit of its previous CEO and the medical leave of its chief operating officer.
With the move, announced late Thursday, Sprouts said that Brad Lukow, interim co-CEO and chief financial officer, has resigned from the company “to pursue other opportunities.” The Phoenix-based specialty grocer’s board has appointed Lawrence “Chip” Molloy as interim CFO until a permanent successor is named.
In early May, Lukow (left) reported during Sprouts’ first-quarter earnings call that President and COO Jim Nielsen was taking a medical leave of absence. Nielsen and Lukow had been serving as interim co-CEOs since the Dec. 30 departure of CEO Amin Maredia, who left the company to pursue other interests.
The appointments of Sinclair and Molloy go into effect on Monday, Sprouts said. Sinclair also will join the company’s board.
“We are extremely excited to have Jack Sinclair as our new chief executive officer following a thorough search and selection process by the board of directors,” said Sprouts Chairman Joseph Fortunato. “Jack is a proven chief executive officer with an outstanding track record in grocery and retail merchandising. On behalf of the board, we look forward to working with Jack as he leads Sprouts forward to continued success.”
Most recently, Sinclair was CEO of 99 Cents Only Stores. He joined the 350-store discount chain in July 2015 and was promoted to CEO in February 2018. From 2007 to 2015, Sinclair served as executive vice president of Walmart’s U.S. grocery division. Sprouts said he spurred growth at the retail giant’s grocery business, which spans more than 4,000 stores, through a focus on local assortments and fresh foods.
Before joining Walmart, Sinclair spent 14 years at Safeway PLC in London, where he oversaw operations, merchandising and marketing for more than 450 Safeway supermarkets and convenience stores in the United Kingdom. He also has served on the board of The Hain Celestial Group, a manufacturer and supplier of organic and natural products, since 2017.
“I am humbled and extremely privileged to be appointed chief executive officer of Sprouts Farmers Market,” Sinclair stated. “Sprouts is a company with a higher purpose — to empower every person to eat healthier and live a better life — and the commitment of its 30,000 team members to drive lasting change in the communities they serve truly resonates with me. I look forward to working with Sprouts’ board of directors, leadership team and all Sprouts team members to continue furthering that purpose.”
According to Jefferies analyst Christopher Mandeville, Sinclair brings a skill set that’s well-matched to those of Sprouts’ remaining C-suite.
“His lengthy experience within discount and grocery should bring significant knowledge to the table, especially in small-format/fresh, as 99 Cents is as produce-focused as you'll get in the dollar channel (and comp growth was quite impressive during his time there), while Walmart’s Neighborhood Market format realized considerable unit growth during his final years in charge of all U.S. grocery,” Mandeville wrote in a research note released late Thursday. “Paired with his exposure to natural and organic CPG at Hain, Sinclair's background could prove highly complementary to President and COO Jim Nielsen, an individual we'd coin as the key man to operations, assuming he returns to the company as planned post-medical leave.”
A seasoned retail CFO, Molloy has been a Sprouts board member since 2013. He served as CFO of Under Armour from 2016 to 2017, CFO of PetSmart from 2007 to 2013, and CFO of retail for Circuit City Stores from 2006 to 2007. Molloy was interim CEO of Torrid LLC during 2018.
“Chip has chaired our audit committee for several years, and his deep knowledge of Sprouts’ business, strategy and financial operations and experience with the investment community make him best-suited to lead Sprouts’ financial affairs while we conduct our search for a permanent chief financial officer,” Fortunato commented.
Sprouts also announced that Shon Boney is stepping down from the board. Boney is a co-founder of Sprouts, which opened its first store in 2002. He has been a board member since 2002 and served as CFO from 2002 to 2005, CEO from 2005 to 2012, and chairman from 2012 to 2013.
“Having Shon on our board has been instrumental as Sprouts has undergone rapid expansion, and we thank him for his service and contribution all these years,” said Fortunato.
The leadership flux comes as Sprouts pursues an aggressive growth strategy. In 2018, the fresh, natural and organic grocer opened 30 stores, and this year it aims to open another 28. The company currently operates more than 320 stores in 19 states, and it expects to have 340 stores in 22 states by the end of this year.
Sprouts entered three new states — Pennsylvania, Washington and South Carolina — and passed the 300-store mark last year. In 2019, the chain will make its debut in another three states: Louisiana, New Jersey and Virginia.
“2019 represents the first year where more than half of our new stores will be opened up in new markets,” Lukow said in mid-May at the BMO Farm to Market Conference in Manhattan.