Running a big retail chain is no easy job in the best of times. In a year like 2023, it was a bitch.
After two years (2020 and 2021) of an insane wave of conspicuous consumption funded by government checks, with a swing to buying stuff rather than services and just plain-old stay-at-home boredom, the economy saw the next two years do a rather radical U-turn.
Every retail year sees a steady churn of CEOs, some a natural progression of executives aging out, others moving on to better jobs, and still others being forced out…even if the exit was couched in wink-wink “seeking other opportunities” language.
But 2023 saw an unprecedented volume in retail turnover – and not the kind of turnover retailers usually want, as in merchandise turnover. This year’s turnover had as much to do with changes in leadership for some of the usual reasons as it did with circumstances unique to the kind of year it was.
2023: Massive Reactionary Shifts
“When the tide goes out, you see who is swimming naked,” is the rather pithy critique usually attributed to Warren Buffet. Whoever said it first certainly summed up what we saw last year. After two years (2020 and 2021) of an insane wave of conspicuous consumption funded by government checks, with a swing to buying stuff rather than services and just plain-old stay-at-home boredom, the economy saw the next two years do a rather radical U-turn. Supply chain nightmares were ubiquitous, prices climbed off the charts, and consumers lusted after travel, restaurants and just about anything other than buying stuff.
Catherine Lepard, global managing partner of retail and direct-to-consumer at the headhunting firm Heidrick & Struggle, told Retail Dive last year that turnover was up to 17 percent in 2023, compared to 11 percent in 2022. That’s a big jump and Retail Dive reported a list of 50 CEO changes last year. So, retail leaders went from being unable to do anything wrong to doing just about everything wrong. Layered on top of the usual annual turnover the revolving door syndrome created corner office churn we haven’t seen perhaps ever. Looking back on what happened last year, we can probably dump the changes into three briefcases (a better receptacle than buckets).
It’s Your Fault
No matter what corp comm said, a lot of CEOs of big retail chains were simply fired. Some got what was coming to them, some were scapegoats, and some were just in the wrong place at the wrong time.
- Look at Jeff Owen, who ran Dollar General and Mike Witynski of Dollar Tree, the two giants of the channel. Both got canned, although the language was a bit more nuanced. The dollar stores should be booming these days with runaway inflation and shoppers worried about the price of gas, the price of meat, and pretty much the price of everything. But neither company (Dollar Tree also owns Family Dollar) seems to be taking advantage of the situation and these two guys took the hit.
- The same dynamics cost the jobs of leaders of two of the biggest drugstore chains: Roz Brewer of Walgreens and Heyward Donigan of Rite Aid. The latter is now in bankruptcy and has some serious legal problems due to opioid lawsuits, but the post-pandemic world has not been kind to drug chains that benefited from all those Covid vaccinations but have been unable to sustain their revenues since.
- Or take Jonathan Johnson, who was asked to leave the premises at the company now called Beyond Inc., known previously throughout its life as Overstock.com. He was a company lifer and though he came from the non-merchandising side of things. He took over the top spot following the departure of his predecessor, Patrick Byrne, who founded the company and then got sidetracked by cybercurrency, conspiracy theories, and a severe case of Trumpism. Johnson bought the Bed Bath & Beyond brand, rebranded his company in record time and then got kicked out by investors unhappy with all of this.
- Sometimes, the pink slip was covered in corporate doubletalk. When Marc Rey exited Beauty Counter the company said it was because it wanted to move “to a new phase of leadership” for the company. Paige Thomas, who ran the Saks Off5th off-price division for Hudson’s Bay Co. “stepped down to pursue other opportunities.”
- And at apparel chain Express, Tim Baxter was let go and all the retailer would say was that it was “unrelated to the company’s accounting or financial reporting,” which is like tossing it out as “you figure out what exactly he did do wrong.”
It’s Not Your Fault, but Go Away Anyway
We may never truly know what happened for many of the exits. When Wolverine Worldwide fired long-time retail veteran Brendan Hoffman, all they would say was that he was “terminated without cause.”
There were plenty more of these, but some CEOs left when ownership of the company they worked for changed. Revlon, the big cosmetics brand, had been run by Debra Perelman, who by sheer coincidence was the daughter of the guy who owned the company, Ron Perelman. But after it emerged from its Chapter 11 bankruptcy, she said, “With successful financing behind us, I believe now is the right time to pass the torch.” One has to wonder which end of that torch she was holding when she made that statement.
Another passing took place at Party City, yet another retailer coming out of bankruptcy, though the pass-off object was less flammable this time. “The timing is right to pass the baton,” Brad Weston said on his way out the door.
And then there was the darling of the Reddit-set day traders, Game Stop. Long a speculative stock play since wheeler dealer Ryan Cohen came into the picture as its big investor, the retailer fired its CEO Matt Furlong “without cause” and named as his successor…wait for it…Ryan Cohen.
The Usual Suspects
Not every change in the corner C-Suite was so intriguing. Wade Miquelon simply retired as CEO of crafts retailer Joann, although that company has had more than its share of troubles post-pandemic and we may eventually learn there’s more to this story than a gold watch and a going-away party.
Over at Costco, Craig Jelinek, only the third leader in the company’s history, is retiring, to be succeeded by Ron Vachris. On the other side of the retail continent Jeff Gennette, CEO of Macy’s, is also retiring with former Bloomingdale’s leader Tony Spring taking his place. It could be that the changeover is a bit ahead of some secret internal schedule, and that’s not far out of the realm of reality.
And then there’s pop superstar Rihanna. She founded the lingerie brand Savage x Fenty but left the CEO role in what may be nothing more than a recognition that it’s time for a professional retailer rather than a professional entertainer to run things…giving hope to the incredulous for all those enduring star CEO leadership brands like Goop and Skims.
24: More…or Less of the Same?
No doubt there are more examples of comings and goings, but you get the picture. The big question is what happens next in this new year. Will this pace continue, or have we seen the worst of it? (Don’t even ask how things will get even worse.) With the retail business expected to get more stable as inflation, supply chain meltdowns and consumer spending patterns swing back to historical balances, the revolving doors on all those corner offices could be moving somewhat more slowly over the next 12 months. Or not. There may still be plenty of naked swimmers out there, but the tide could be turning. At least one can hope.