SUPERVALU Fires CEO, Names Sales to Take OverVW Staff
In a press release on Monday, SUPERVALU INC. (NYSE:SVU) announced that its chairman of the board Wayne C. Sales had been named as the company’s president and chief executive officer; he replaces Craig R. Herkert who was forced out by the company after three years. Sales will continue his chairman responsibilities.
The new CEO has been a SUPERVALU INC. (NYSE:SVU) director since 2006 and the non-executive chairman of the Board since 2010. Prior to joining SUPERVALU’s board, Sales was the former vice chairman of Canadian Tire Corporation Limited (TSE:CTC) (TSE:CTC.A) and its president and chief executive officer from 2000 until 2006.
The ousting of Heckert comes after the company has endured difficult times, especially in this month. We reported back on July 16that it had announced a terrible first quarter earnings report followed by a suspension of its dividend. It also said it would either sell all of part of SUPERVALU and hired Goldman Sachs Group, Inc. (NYSE:GS) and Greenhill & Co., Inc. (NYSE:GHL) to advise.
On July 16, the Wall Street Journal reported that Supervalu had opened its books up to the private-equity firms Cerberus Capital Management, Kohlberg Kravis Roberts & Co. and TPG Capital; C&S Wholesale Grocers Inc. was also expected to take a peek.
By July 13, the company had hit a 32-year low in its stock price and through last Friday, it had dropped further, losing 75 percent of its value.
With the change in leadership what can investors expect?
Sales said in Monday’s release, “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.”
The new CEO also immediately reached out to employees in a letter. As noted by the Wall Street Journal’s Annie Gasparro, Sales believes his Canadian Tire experience will be valuable to changing things at SUPERVALU.
Here’s a few highlights from the letter that includes a list of to-dos:
Generate profitable sales
“We will take immediate steps to profitably improve sales and create points of sustainable differentiation in the marketplace. This will happen while we continue to roll out long-term price improvements. Our goal is to be competitively priced, and we will move as quickly as possible to achieve this.”
Take significant costs out of the business
“We will position ourselves for the future and we won’t take steps that impede our ability to serve customers. Simply stated, we must implement initiatives that take cost out of our business faster than we make our price investments.”
“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.”
Build on legacy of serving independent retailers
“We will work with our independent retailers to reinforce their confidence in our ability to provide the superior service they need to increase sales and profitability.”
Sales concluded the letter by saying the clock is ticking for the company and pledged his commitment. He also asked employees if they would join him in “this transformation.”
SUPERVALU’s stock is up 3.52 percent to $2.06.