At Lowe’s, a leadership makeover
A COO is out, a chief customer officer is leaving; and the search is on for an executive VP of Stores.
Looking to improve its focus and its omni-channel capabilities, Mooresville, N.C.-based Lowe’s announced a new leadership structure late Monday. In doing so, the company eliminated the positions of some high-ranking executives.
Chief Operating Officer Richard Maltsbarger will be leaving the company, effective immediately. Maltsbarger had been with the company since 2004 and had just been named COO this past November; a role he took over in February 2018.
And Chief Customer Officer Michael McDermott, will leave the company effective Nov. 6 — a delay designed to ensure a smooth transition, the company said. McDermott joined Lowe’s in 2014 and was promoted in 2016.
The move was announced just seven days after Marvin R. Ellison officially began his duties as the new president and CEO. “We have taken a fresh look at our organizational structure and are realigning our leadership team to improve our focus, better leverage Lowe’s omni-channel capabilities and deliver increased value for our customers, associates and shareholders,” said Ellison.
Ellison, a former Home Depot executive, came to Lowe’s after serving as CEO of JCPenney since 2014.
In addition to the COO and chief customer officer, Lowe’s will eliminate the positions of corporate administration executive and chief development officer. The plan is to create a structure with “simplified roles and responsibilities to drive operational excellence,” according to a release announcing the moves.
The release also described the positions and the people involved in the new structure:
- EVP, Merchandising: This role will be responsible for merchandising, marketing, digital, and data analytics and customer insights. William P. (Bill) Boltz has been named to the role, effective Aug. 15, 2018. Boltz is an accomplished executive with more than three decades of retail operations, marketing and merchandising experience and is currently the president and CEO of Chervon North America. In this role, Boltz oversees the sales, marketing, engineering and product development in North America of products under the EGO, SKIL and Skilsaw brands. Chervon, as a global power tool supplier, currently produces products as an original equipment manufacturer for a number of key professional power tool brands and also produces and develops products under the Kobalt and Craftsman brands as well as other private label brands. In addition, Boltz previously held several leadership roles in merchandising at The Home Depot, including senior vice president of hardlines, which consisted of hardware, tools, nursery, cleaning, seasonal, outdoor power and holiday decor. Prior to The Home Depot, Boltz worked at Sears Holdings Corporation for more than 20 years, culminating in his role as vice president, general merchandise manager within home improvement.
- EVP, Stores: The company has initiated an external search for this newly created role, which will oversee the North, South and West divisions, Orchard Supply Hardware, operations engineering, Pro and services businesses, and asset protection. The senior leaders of the store operations team will report to the CEO until an EVP is named.
- EVP, Supply Chain: This newly created role will oversee distribution centers, logistics, global sourcing, transportation and delivery services. Mike West, current senior vice president, supply chain operations, will serve in the role on a transitional basis while an external search is underway.
- SVP, Chief Information Officer: Paul D. Ramsay will remain in his current role as CIO.
- EVP, Chief Financial Officer: As previously announced, Marshall A. Croom plans to retire from the company, effective Oct. 5, 2018. An external search is underway. Croom will continue in his role as chief financial officer until his successor is appointed, and then remain with the company during a transition period until his retirement date.
- EVP, General Counsel & Corporate Secretary: Bill McCanless will remain in his current role as EVP, general counsel and corporate secretary. Effective immediately, N. Brian Peace, SVP, administration, will report to McCanless. Peace will take another role in the fall.
- EVP, Human Resources: Jennifer L. Weber will remain in her current role as EVP, human resources.
- President & CEO, Canada: Sylvain Prud‘homme will remain in his current role as president & CEO, Canada, where he will continue to oversee operations in Canada and Mexico.
“As we make this transition, I would like to recognize the numerous contributions of the senior leaders departing Lowe’s and thank them for their years of service,” Ellison said.
The responsibilities of the eliminated positions will be assumed by other senior leadership roles that will report directly to Ellison, the company said. These changes are effective immediately but will require a transition period until all roles are permanently filled, the company said.
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Former Home Depot exec to lead Lowe’s
A former Home Depot executive will soon be running the show at Lowe’s. The Mooresville, N.C.-based home improvement giant on Tuesday named Marvin R. Ellison as president and CEO, effective July 2.
Ellison will succeed Robert A. Niblock, who previously announced his intention to retire. Ellison is chairman and CEO of JC.Penney, where he has been working to turnaround the chain to mixed results.
Ellison joined Penney in 2014 as president and CEO-designee, taking the top role in 2015. Prior to Penney, Ellison spent more than 12 years at The Home Depot, where he served as executive VP of U.S. stores from 2008 to 2014 and was responsible for sales, profit and overall operations for 2,000 stores and $65 billion in annual sales volume. Before the Home Depot, Ellison spent 15 years at Target Corp. in a variety of operational roles.
He will step down as chairman of Penney effective immediately, and step down as CEO on June 1.
In a statement, Ellison said: “I am thrilled to take on the role as Lowe’s next president and CEO. Working closely with Lowe’s board, management team and the more than 310,000 talented employees, I believe we will not just compete, but win in today’s complex retail environment. Together, we will leverage Lowe’s omni-channel capabilities to deliver the most simple and seamless customer experiences as we execute with purpose and put the customer first in everything we do.”
At Lowe’s, Ellison steps back into a key role in the industry’s largest retail rivalry. In terms of U.S. comparable store sales, Lowe’s has consistently trailed its rival Home Depot in recent years. The last quarterly head-to-head advantage for Lowe’s occurred in the first quarter of 2016 — a 7.5% gain for Lowe’s, compared to Depot’s 7.4% gain.
Meanwhile, Lowe’s executives in recent years have consistently hammered on the theme of transforming the mindset of the company from a big box retailer to an omni-channel improvement company.
Ellison brings a strong business resume to his new post. He is currently a director of FedEx Corporation, the Retail Industry Leaders Association (RILA) and the National Retail Federation. Ellison was named to Fortune’s “World’s Greatest Leaders in 2016” and recognized as the “2016 Corporate Executive of the Year” by Black Enterprise. Ellison holds a BBA degree in marketing from the University of Memphis and a MBA from Emory University.
“Attracting Marvin is a great win for the entire Lowe’s team,” said Marshall O. Larsen, lead director of the Lowe’s board. “Marvin is an experienced retail CEO with extensive expertise in a complex omni-channel consumer-facing company. He also brings significant experience in the home improvement industry, with a proven track record of global operational excellence and driving results from both DIY and Pro customers. Marvin joins Lowe’s at a critical inflection point as we work to enhance our competitive position and capitalize on solid project demand in an evolving consumer environment.”
It’s a deal: True Value agrees to sale
A special meeting of the True Value board of directors Friday morning announced the results of a proxy vote, and it wasn’t close. In management’s final tally, True Value members voted 85% to pass the deal, which will turn over 70% equity of True Value Company to ACON Investments. Current True Value members will keep 30% equity, as well as receive a $196 million cash payout.
The announcement Friday morning marked the culmination of a process that began March 15, when True Value announced its intention, with the unanimous support of True Value’s board of directors, to enter into the deal with the Washington, D.C.-based private equity company.
“We’re excited about the overwhelming, positive response that we got from our shareholders, they have been the decision makers in this process,” said John Hartmann, True Value CEO.
From the beginning, True Value management has promoted the transaction as a growth strategy. An opportunity, as Hartmann said in the March 15 announcement, “to unlock the substantial majority of their investment while accelerating the transformation of the company to better serve our customers.”
When the deal is finally signed and sealed, as is expected in the coming days, the following key provisions of the plan kick in:
- ACON will acquire 70% of the company, with 30% equity retained by members
- True Value members will receive $229 million in returns and credits. Of that, $196 million will be paid in cash.
- True Value will cease to exist as a co-op and will begin to exist as a nationally branded wholesale distributor.
The vote was a landslide that overcame a vocal minority of True Value members who opposed the deal. Organized resistance to the proposal gravitated to the web page “Concerned True Value Members” on Facebook.
Asked about the criticism on that page, Hartmann pointed to the strong support of the plan reflected in the vote. “Everyone is entitled to their opinion, but what really matters is the vote. In the end everyone is a part of the True Value family, and this was not a 51-49 thing.” He added. “I don’t really care who voted [for or against]. My team and I need to continue to earn our members business every day.”
Despite the dramatic change in structure created by the vote, Hartmann says the dealer-distributor relationship will remain the same, with business as usual, for at least the near future. Any dealer currently using the brand can continue to use it. In the future, a minimum-purchase threshold will entitle dealers to use the True Value brand in the store and in local media, as well as participation in the True Value e-commerce ship to store program.
Hartmann added that True Value dealers have already discussed plans to use the release of the equity in the next couple of weeks to reinvest in their business, or happily make a bank deposit with their money, he said.
“We believe we’ve been responsive to our shareholders’ questions about all of these things,” he said. “We’re very excited about the future and about helping them to continue to grow.”
In a prepared statement, Aron Schwartz, managing partner of ACON said: “True Value is an iconic brand and one that we have long admired. We believe that independent hardware retailers are an essential part of our society, providing consumers and communities with unrivalled service and expertise. We share True Value’s passion for helping to ensure that the independent hardware retailer thrives for decades to come, even as times change and the competition gets tougher.”
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