Phil Lempert (00:05)
Welcome to another episode of Retail Unwrapped. Today, we’re going to talk about should you hire the enemy or promote within? There’s three succession models that we can talk about. Promote from within, hire from outside the industry, or hire the enemy. Now, Mark and I and Deborah had this conversation that really emanated ⁓ from the big change over at Kroger. And what we looked at is between October 2024,

and April, 2026, it’s been the most turbulent CEO cycle in a generation.

Retail companies reported 41 CEO exits through August, 2025. That’s a 116 % increase from the same period a year earlier.

Mark, what’s going on here?

Mark A. Cohen (00:55)
Well, what can I say? It’s a great time for CEOs to be looking for opportunity. It’s not a great time to be a sitting CEO unless you’re running your business well.

Phil Lempert (01:07)
So when we take a look at what’s gone on with all these CEOs, is it because, pardon me for saying this, it’s a bunch of old white guys that are near retirement, or are they just basically not doing a good job and it’s time to clean house?

Mark A. Cohen (01:26)
Well, know, succession is about the most risk prone moment in a corporation’s life. Sometimes it’s a perfectly orderly transition, ⁓ often from a company doing very well that’s prepared a successor ⁓ for a long period of time. ⁓ Example, Steve Jobs, Tim Cook, example, Jeff Bezos, Andrew Jassy.

Sometimes that orderly succession ⁓ becomes a train wreck. Example, Bob Ulrich at Target and Greg Steinhoffel. Steinhoffel had been with Target his whole career and was expected to ⁓ continue Target’s ⁓ upward ride. He drove it into a guardrail. ⁓ This is an extremely challenging and difficult moment.

for a corporation when succession ⁓ is called for.

Phil Lempert (02:26)
So, Mark, you’ve done this for a long time. You’ve led lots of different companies. What’s the most important thing that a CEO needs to do in retail?

Mark A. Cohen (02:39)
Well, in addition to running their business, they need to nurture their team. And in doing that, they need to identify potential and then ultimately actual succession candidates ⁓ who are ⁓ actually prepared to take the baton and run with it, as opposed to just sort of earning the opportunity by virtue of seniority, which all too often is

the default that a board reaches for, which sometimes is a catastrophe in and of itself.

Phil Lempert (03:16)
Is it because it’s just easy? If I take a look, early February, Greg Foreign appointed CEO of Kroger. It’s the first time Kroger went externally for the top role. But from my vantage point, it was brilliant because he used to be head of Walmart US and he knows where all the bodies are buried at Walmart.

⁓ what he can do and Kroger has talked about even before the whole Albertsons debacle, the boys talked about Walmart’s their number one competitor.

Mark A. Cohen (03:57)
Phil, you’ve coined a brilliant way of describing what just happened at Kroger when you said hire the enemy. ⁓ If ever there was an enemy of enormous consequence that Kroger has been facing, it’s Walmart. And if ever there was an architect of Walmart’s recent brilliant success, it’s Greg Foran.

Okay, so is his success at Kroger something that is a guarantee? No, of course there’s enormous hurdles whenever anyone from outside an organization signs up, but he certainly would appear to have all of the skills, tools, and points of view that he used successfully at Walmart that Kroger is desperately in need of.

Phil Lempert (04:52)
Well, what I also like about him, Mark, is that, you know, he cares about the in-store experience. He cares about the employees, to your point. He raised the hourly wage at Walmart. He really gets e-commerce in a good way. And for me, you know, and I’ve been a fan and not a fan of Kroger off and on for probably the past 30 years. ⁓ And, you know, Kroger, in my opinion, was asleep at the wheel.

They just threw money at everything. They just went on acquisitions. They wasted, in my opinion, a lot of money on a Cato. They decided that they were going to go to Florida and not open up any stores, but everything being just delivery. So I think they lost their way. So I think that he’s going to be a good leader for them.

Mark A. Cohen (05:42)
Well, let’s hope that he makes good on your characterization of succession, hire the enemy. Now, you’ve got to be careful. You’re actually hiring an enemy who has the skill set to ⁓ translate, transfer their capabilities into your organization, which is not an automatic. And of course, there is this ⁓ view in executive search. ⁓

that ⁓ once an athlete, always an athlete, which is ⁓ occasionally a correct way to view succession, but usually a catastrophe. I would offer up the Michael Jordan ⁓ analogy, arguably the most incredible basketball player ever, ⁓ a ballet dancer on the court who could do no wrong. And yet when he became a baseball player, he couldn’t hit a baseball to save his life. ⁓

The board, which is typically in charge of succession or has to greenlight succession, ⁓ has to be very thoughtful and careful about what they’re doing. And all too often, the default is to promote somebody from within because it’s easy. And that works when it works, and it’s a catastrophe when it doesn’t.

Phil Lempert (07:03)
Well, you know, you have a great analogy there. And, you know, I guess what what I’m thinking is you can hire the enemy in the same channel. But if you go into a different channel and you’re putting them in grocery or you’re putting them in hard goods or whatever ⁓ there, it’s it’s more risky. You know, let’s go back and talk about, you know, Target, Brian Cornell for years.

you know many years was always talking about he’s gonna ramp up grocery groceries where it’s at and so on never happened ⁓ do you think that that now ⁓ they’ve got a chance of of going after grocery or is it the same old stuff since you know mike is a tenured target person

Mark A. Cohen (07:51)
Well, I think the biggest issue that I have, that I’ve have voiced and others have agreed, is the danger in promoting someone from the organization who has presided over the organization’s failures. And in the case of Fidelky, he’s been with the company for many, many years. He’s been with the company in a senior position. He has witnessed, if not presided over their loss of momentum and loss of focus.

And now that he’s the new CEO, he’s saying all the right things about what has to ⁓ happen, but can he be trusted to really be able to deliver that? New CEOs always have the right things to say about what they intend to accomplish. They talk the talk. Many of them never get to deliver what they’re promising. So I’m very, very cynical about promotions from within. ⁓

Phil Lempert (08:35)
Sorry.

Mark A. Cohen (08:50)
in organizations that are struggling, if not out and out in need of a turnaround, involving someone who has participated in the reason for the need for ⁓ succession in the first place.

Phil Lempert (09:06)
So let’s switch gears a little bit. ⁓ Talk to me about Lululemon. You know, this was a hot brand, hot company. They had stores all over the place and it appears to me, and you know this far better than I do, that it’s really a mess and could potentially be gone.

Mark A. Cohen (09:29)
You know, this is the wonderment of a brilliant idea coming to life, ⁓ which in and of itself is a phenomenon of consequence. And then of course, it goes on an enormous growth care, which is ⁓ of enormous consequence. But along the way, ⁓ from the succession from founder to a handful of people and ultimately to the guy who just essentially got fired.

the company lost sight of what made it famous which is to say a yoga pant and Incomprehensibly they launched three Yoga pants which were category failures which customers were absolutely up in arms about I Don’t know how you do that. I don’t know how you you focus your your design and and sourcing and production on a key product

that keeps the lights on in your stores and fail to realize that it is unacceptable to your customer. Did anybody think to try on some post-production samples ⁓ and maybe even test market ⁓ these products before they launch them in hundreds of stores? And so the guy who just left was touted as a brilliant CEO until it became apparent

that he was really ⁓ focusing mostly on icing and not much attention to the cake.

Phil Lempert (11:06)
So who are the retailers? Well, first I’ll tell you the one that I’m most concerned about. ⁓ And then, you know, I’d like to hear from you who are the retailers that we really should be watching carefully, that there’s going to be CEO successions, that there’s going to be a change of management, that they’re at risk. ⁓ So for me, I’m really curious about Grocery Outlet. So Grocery Outlet, again, to your point, huge expansion.

⁓ interesting model, now they’re closing stores, they went public, and it’s a shame they lost their way, just like Lululemon. mean, basically what Grocery Outlet did is they bought products that were either discontinued, near expiration, whatever, to be able to have all kinds of great deals. Then what happens is they say, well, we’re gonna compete with the Kroger’s of the world.

we’re going to have our own private label, we’re going to put in more produce, they really lost their way. Who are you looking at and really concerned that the same thing might happen?

Mark A. Cohen (12:19)
Well, ⁓ I’m very cynical about what might happen at Kohl’s. Kohl’s has gone through years and years of failed successions.

Phil Lempert (12:25)
Yeah.

Mark A. Cohen (12:32)
⁓ Not to focus on names, but Kevin Mansell ⁓ inherited the ⁓ CEO position from Larry Montgomery when Larry Montgomery retired. had been with Coles for many years. Kevin did not have the wherewithal to position the business for the future. ⁓ He mentored Michelle Gass for a few years who had come from Starbucks, who was seen as a brilliant choice.

She spent a few years basically wandering in the darkness. Eventually, Tom Kingsbury, who had been a board member, was given the CEO job and he did have some relevant, some apparently relevant retail experience, but not really. And he actually self-ejected ⁓ after making some really bad decisions that had hurt their business badly. And then they had that failed…

recruitment placement of Ashley Buchanan, who somehow they failed to vet. He was hired and spent maybe two or three months in the job before he became, ⁓ he was revealed. And now they have promoted a board member, Michael Bender, who’s been presiding as a board member of all this chaos and poor performance. And now he is saying all the right things.

but he himself doesn’t have a background that suggests he’s going to deliver. And so I worry that Coles continues to wander looking for, ⁓ looking for land. The other example I would bring up is Macy’s, you know, ⁓ Tony Spring at Macy’s is, is, is someone who, who was a brilliant as the CEO of Bloomingdale’s. He had been mentored for 20 years by

Mike Gould, who served as a brilliant CEO at Bloomingdale’s, who in fact took the reins from legendary Marvin Traub in a succession that was viewed as an impending catastrophe, but in fact was anything but that, largely due to Mike’s devotion to getting it right. Now Tony is in the seat at Macy’s, which is a mess, which has been a mess for 20 years.

Phil Lempert (14:35)
Yep.

Mark A. Cohen (14:56)
And ⁓ he’s busily rebuilding the organization from the ground up based on retail fundamentals. But of course, the big challenge he’s got, this is the challenge for any CEO in a substantial turnaround, is not only how do you fix the business and plug the leaks, but how do you re-image and reposition the business for the future, which is something Macy’s is desperately in need of.

Phil Lempert (15:24)
So, and I agree with both those examples. The other one that I’m very concerned about is Saks Global. That’s, you know, I’m shocked to see what’s happened. here in California, you know, what they did, which to me was unbelievable, they closed their Saks store in ⁓ Beverly Hills. They moved into the old Barneys building, which was fabulous.

and you walk in there and it looks like, ⁓ you know, looks like a Garmento, you know, racks all over the place. They took this beautiful building and the old sacks was well designed and so on and they move into Barneys and it looks like nobody’s in charge.

Mark A. Cohen (16:15)
Well, ⁓ Sachs Global is going to rank right up there with retail catastrophes alongside JCPenney, for example. ⁓ You may recall JCPenney ⁓ suffered from a series of catastrophic successions. ⁓ Mike Ulrich turned the baton over to Ron Johnson, who was a guy from Apple.

who was thought to be a retail genius who promptly caused the company to drop $3.2 billion in 13 months. In fact, he had no idea what he was doing. That was the end of JCPenney, although they’re still in business. Sachs has been a failing business for years. Neiman Marcus was in fact a bankruptcy survivor. ⁓ Lots of folks thought putting them together made a lot of sense.

you know, highly competitive ⁓ niche retailers, except that ⁓ if you look at their geography and their customer overlap, it probably made much less sense. And then, of course, the way in which this was orchestrated by a financial pirate ⁓ had the world just waiting for the headline to suggest that they would file. Now,

The guy running Sachs Global was the former CEO of Neiman Marcus. He was probably the only one who could have been tapped to take over the company in bankruptcy. But he himself was not viewed as a paragon of virtue when he was running Neiman Marcus. ⁓ He’s saying all the right things. They’re certainly in a hurry to shrink their foundation down to something that they claim will be far more manageable.

All of that remains to be seen.

Phil Lempert (18:11)
So the themes that I keep on hearing from you is people saying the right things. How can we, ⁓ as we’re observing the retail business, how can we separate the truth from saying the right things? And in looking at these people, I mean, from my standpoint, ⁓ a retail CEO

Probably the most important thing is to have talent. In this era of technology and store brands and pricing, the only thing that a competitor can’t copy is exceptional human capital. And that has to be at the top. So how can we have a lens to separate truth from good PR?

Mark A. Cohen (19:06)
Well, in the retail business, I’ve always thought that to ⁓ validate what someone is saying, you have to go into the organization or organizations they’ve been part of and look for demonstrations or proof. So in a nutshell, go visit the guy or gal’s store and see if what they talk about as their strengths is available for view.

You know, mean, I go talk to the people who’ve worked with and for them. Go talk to the people who have done business with them to suss out whether they’re just talking the talk or they’ve actually accomplished something of consequence that you can then count on when you put them in another new job. All too often, these folks are posers when you get right down to it. They have very impressive CVs.

They’re usually very articulate and charming. And some of them are just so full of it, it takes your breath away when we discover that they can’t manage.

Phil Lempert (20:17)
Well, you make an excellent point ⁓ that, you know, go see what they’ve done. think that’s, you know, Greg’s potential success at Kroger. I mean, he did a great job at Walmart ⁓ in the stores and with the people. And I think that’s important. ⁓ The other thing that you told me ⁓ is I’m just looking at my notes ⁓ that I thought was really interesting is

is the fact that we’re in this era where these companies are searching and they’re searching ⁓ for the money. They’re searching for having venture capital come in. They’re searching for everything in my view, except the customer.

They’re forgetting about the customer. And isn’t the job of a CEO to make sure that that retailer is focused on the customer needs?

Mark A. Cohen (21:21)
You know, everybody talks about how devoted they are to the customer, how devoted they are to serving the customer. And yet many of these folks in retail, once they arrive in the corner suite, never have any contact with customers. They don’t visit stores, don’t visit fulfillment facilities, distribution centers, they don’t go out.

amidst the people that keep their lights on and understand what they’re facing and what they’re doing and what their needs and criticisms and wants are. ⁓ I’m told that the new Kroger CEO spent a lot of time every week visiting Walmart stores. And though I don’t know this for a fact, I doubt he was just going to that select group of stores that were always perfectly positioned for

Phil Lempert (22:16)
Great.

Mark A. Cohen (22:18)
you know, the suits to show up and be impressed. ⁓ One of the CEOs of Macy’s visited stores regularly, which were curiously adjacent to his favorite golf courses and always knew his schedule and were always, in his eyes, perfect. Of course, he went nowhere near hundreds that were desperately in need of paint, carpet, and merchandise. ⁓

You have to visit stores, have to come in close contact with customers and with the people who serve those customers directly. If it’s an online business, you need to get on the chat line and listen in. You need to get into a position of actual contact rather than delude yourself into thinking that we’ve got a strategy, everybody signed up for the strategy, it’s all being delivered because that’s often just not the case.

Brian Cornell let Target go to hell after he had promised when he arrived to spend $4.5 billion to refreshing stores. He did that and then he went to sleep. I don’t know how you run a business even if you’ve got thousands of stores without spending that shoe leather time validating what is supposed to be happening.

Phil Lempert (23:39)
And isn’t it the board’s responsibility to make sure that that CEO is, you know, going to the stores and focused on the customers? And you also bring up, and we haven’t talked a lot about online shopping, and because of everything that we’re seeing at retail, whether it’s, you know, Saks or Macy’s or any of these others that we’ve talked about, Kohl’s,

You know, should we just close the stores and just focus on online?

Mark A. Cohen (24:12)
I think customers for most categories of merchandise expect complete access, which is to say store and online. They want to see what you have to sell online and then actually make a decision in store or the other way around. You know, they want to browse the store and then go home and make a purchase selection in the privacy of their own home. There are some businesses that don’t need to have both tracks in place.

But for the most part, think it’s absolutely a requirement for the future, even if your website is only being used ⁓ as a communication and positioning vehicle. ⁓ At the end of the day, ⁓ for most categories, customers will always want to touch and feel and try and sample things in person.

not just exclusively reach for that buy button on their Amazon site.

Phil Lempert (25:12)
⁓ What advice should we give to these boards? What advice should we give to the CEOs? And I’m going to go back to what I said at the top. Hire your best enemy. What do you want to give advice?

Mark A. Cohen (25:29)
I think a board has to be intimately involved in the mechanics and performance of a business and its people and has to engage in succession, thinking and succession planning long before a decision will be or might be necessary.

Phil Lempert (25:51)
Thank you all for joining us on another edition of Retail Unwrapped.