September 14, 2016 – Korn Ferry has been retained by home furnishings retail company Pier 1 Imports to lead its search for a new chief executive officer. Current CEO Alex Smith is leaving at the end of the year. His departure comes as the company also said last week that sales fell 6.7 percent in the second quarter.
Mr. Smith had a strong start and led a turnaround at Pier 1 after the recession, but more recently the company has struggled with its online business and profit margins. In April, it said that Mr. Smith was taking a pay cut by not receiving a stock award in 2015. At the time, Mr. Smith said 2015 had been another “challenging year” with heavy discounting by competitors.
The stock price hasn’t recovered since February 2015, when chief financial officer Cary Turner abruptly retired on the day Pier 1 surprised investors with weaker than expected fourth quarter results. It was widely believed that Mr. Smith fired Mr. Turner, who had been with the company for 23 years.
Founded in 1962, Pier 1 Imports is a Fort Worth–based retailer specializing in imported home furnishings and decor, particularly furniture, table-top items, decorative accessories, and seasonal decor. It has locations in all 50 states and Canada as well as a flourishing e-commerce website.
Korn Ferry’s retail sector focuses on helping companies attract, develop, and retain best-in-class executive and C-suite leaders. The firm offers a full suite of solutions designed to address retail talent needs — C-suite, executive, and non-executive search; competency-based assessments; engaging, interactive high-potential leadership development programs; one-on-one coaching; strategic talent design; and succession planning. Sector coverage includes: fashion (wholesale and retail); general merchandise; luxury goods; specialty retail; e-commerce and direct-to-consumer; department stores; grocery/drug stores.
Retail Sector Facing Major Shifts
Korn Ferry says retailers are facing major shifts in their businesses that call for ‘unprecedented responses’ by CEOs who can effectively lead through change, intuitively and analytically understand the evolving consumer, and respond to ambiguity. According to the firm, developed markets, excess retail capacity, rising prices, the shift to omni-channel retail, and the unpredictable pace of change in consumer shopping habits all affect the type of leader retailers need.
According to retail-focused executive recruiter Herbert Mines, 31 percent of incoming retail CEO’s are focused on international expansion as a key strategic priority, making that global mindset a competitive differentiator.
Retail CEO Turnover Reaching New Highs
Interestingly, retail CEO turnover is accelerating. According to Herbert Mines, 47 percent of public retail companies with revenues exceeding $1 billion experienced a chief executive change the past five years (up from 34 percent during the previous three years). Since 2007, 71 percent of retail companies have experienced a switch in CEO.
Hunt Scanlon has reported on several leadership changes at top retail companies in recent months. Here is the latest sampling:
- DHR International recruited Andy Donkin as chief marketing officer of Under Armour. Mr. Donkin previously served as head of worldwide mass and brand marketing at Amazon, where he managed the company’s global media budget and developed offline and online campaigns globally for North America, Europe and Asia.
- Herbert Mines Associates placed Mary Ellen Coyne as CEO of J.McLaughlin. Ms. Coyne joined J.McLaughlin after spending 19 years at Ralph Lauren, having most recently served as chief merchandising officer of the POLO Women’s and Children’s divisions. The firm also recruited Stacia Andersen as president of Abercrombie & Fitch and Abercrombie Kids and Kristin Scott as president of the Hollister Co. brand. Ms. Andersen most recently served as SVP responsible for the apparel, accessories and baby businesses at Target Corp. Ms. Scott was EVP and general merchandise manager at Victoria’s Secret.
- Reffett Associates tapped Marc Jones as chief operating officer of HAC, Inc., parent of Homeland Grocery Stores. Mr. Jones previously served as chief merchandising and supply chain officer of Greensboro, NC-based The Fresh Market.
- Heidrick & Struggles recruited Lawrence Mac Dougall as CEO of South African-headquartered Tiger Brands Limited. Mr. Mac Dougall previously worked as managing director of Bromor Foods and Cadbury (Pty) Ltd in South Africa. He also led Kraft Foods and Mondelez International as regional president.
Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media