The search is on for a new president and COO at Family Dollar following the resignation of Michael Bloom amid deteriorating financial results and a 3% same store sales decline in December.
Bloom, who recently donned a disguise to appear in an episode of the CBS show "Undercover Boss," spent two years as Family Dollar’s president and COO and joined the company from CVS. In conjunction with his departure, Family Dollar elevated Jason Reiser to the role of EVP and chief merchandising officer and he will report directly to Family Dollar chairman and CEO Howard Levine. Reiser joined Family Dollar in July 2013 as SVP of merchandising after a 17-year career with Sam’s Club and by October of last year he had already been promoted to the role of SVP/lead merchandising officer.
The senior leadership moves were announced in conjunction with dismal sales results for the company's first quarter ended November 30 and a 3% decline in December same store sales which prompted the company to forecast further top line weakness and lower its profit forecast. Family Dollar said sales for its first quarter ended November 30, increased a meager 3.2% to $2.5 billion due to the addition of new stores. Same store sales declined 2.8% as fewer people shopped its stores and those who did spent less money.
Reversing those trends now falls to new head merchant Reiser who will have responsibility for the company’s merchandising, global sourcing, marketing, replenishment and financial planning teams.
“Continuing to refine our assortment to meet the needs of our customer is critical to being a compelling place to shop,” said Levine. “Jason’s proven leadership, merchandising experience and deep understanding of our customer position him well to ensure that we grow both customer trips and market share.”
Improvement is not expected to be immediate, however, as Levine noted a challenged consumer and intensified promotional environment continue to affect the company’s business. That was the case in December when Levine said the company was forced to react to softness in discretionary categories by becoming more promotional.
"Reflecting our December results, our expectations that the macroeconomic trends will continue, and the impact of investments we plan to make to strengthen our value proposition, we have lowered our earnings expectations for the second quarter of fiscal 2014 and the full year,” Levine said. “While we have made meaningful progress to improve our execution, our financial performance has not met our expectations. We have a great business model and ample growth opportunity, and I know we can do better.”
The immediate focus for Family Dollar, according to Levine, is to execute the basics of retail; re-accelerate customer traffic, strengthen the value proposition and enhance the relevancy of its assortment.
“We also intend to maintain our focus on reducing costs while also selectively investing in new stores, our renovation program and supply chain improvements to position our long-term growth,” Levine said.