Dollar Tree overhauls C-suite
Company seeking replacements for COO, four other execs
Chesapeake-based Fortune 500 discount retailer Dollar Tree is overhauling much of its C-suite leadership, the company announced Tuesday.
Dollar Tree Stores Inc., which also owns the Family Dollar chain, is seeking permanent replacements for its chief operating officer, chief strategy officer, chief financial officer, chief information officer and chief legal officer.
Dollar Tree CFO Kevin Wampler will transition out of his role when a successor is named and will stay with Dollar Tree as an adviser until April 2023. “Mr. Wampler’s transition is not due to any disagreement with the company on any matter relating to the company’s financial reporting, policies or practices,” Dollar Tree stated in a June 28 filing with the Securities and Exchange Commission.
Chief Legal Officer and Corporate Secretary William Old, COO Thomas O’Boyle, Chief Strategy Officer David Jacobs and CIO Andy Paisley are no longer with the company, according to a news release from Dollar Tree. “The four departing executives will each receive a severance of continued base salary for 24 months and certain other benefits in accordance with the terms of their existing executive agreements. Long-term incentive awards will be governed by the terms of the existing plans and award agreements,” Dollar Tree said in the SEC filing.
Dollar Tree has already named interim leaders who will assume the responsibilities for the vacant posts and the company said it is in “advanced discussions with several candidates for certain positions.” Dollar Tree President and CEO Michael Witynski will serve as interim chief operating officer, according to the filing.
“As we look to the future, I believe these changes within our leadership team will bring new perspectives and experiences that will help accelerate our continued growth and deliver even greater value for our shareholders, customers, employees and suppliers,” Witynski said in a statement. “I want to thank Kevin, Will, Tom, David and Andy for their many years of dedicated service to the company and for enabling us to get to this point. We wish each of them the best in their future endeavors.”
Dollar Tree Board Chairman Rick Dreiling backed the decisions. “Our board is fully aligned with Mike that now is the right time to bring in new leadership to ensure the company remains on a strong trajectory,” he said in a statement.
In a statement to its investors, Wells Fargo analysts said, “While this looks like a lot of change on the surface, it was needed in our view and we support management’s decision to rip the band-aid off and expedite the turnaround. Overall this looks like a positive for the transformation narrative,” Wells Fargo analysts wrote.
In December 2021, activist investment firm Mantle Ridge, which owns a $1.8 billion stake in Dollar Tree, sought to overhaul Dollar Tree’s board and hire the former CEO of rival retailer Dollar General Corp., Reuters reported. Dreiling, Dollar Tree’s chairman, was CEO of Dollar General from 2008 until his retirement in June 2015, and served as Dollar General’s chairman until 2016.
In March, Dollar Tree named Dreiling as executive chair and made Mantle Ridge’s founder and CEO Paul Hilal vice chair, along with appointing five new directors and five continuing directors. The board also added a new finance committee and restructured its nominating, governance, sustainability and compensation committees to create a new, separate committee focused on sustainability and corporate social responsibility.
Mantle Ridge declined to comment for this story.
“It looks like they are trying to bring in a whole different perspective to sort of turn around Dollar Tree,” Reuben Gregg Brewer, a contributing analyst with Motley Fool, said. “There’s something going on here, and I can see why an outside investor would come in and say, ‘Maybe you guys need to do something different.’
“When you take out a number of important people all at once, it creates uncertainty. It creates chaos, usually. This is really rocking the boat. It’s big,” he said.
In May, Dollar Tree poached two former Dollar General executives, hiring John Flanigan as chief supply chain officer and Larry Gatt as chief merchandising officer.
At the end of 2021, Dollar Tree hiked prices to $1.25 at its stores nationwide for the first time, saying the stores would only sell discontinued products at the $1 price point. The company has more than 15,900 stores across the U.S. and more than 193,000 employees.
In the first quarter of the year, Dollar Tree’s gross profit increased 19.2% to $2.34 billion, up from $1.96 billion during the same period last year. Net income increased 43.2% in the first quarter to $536.4 million. Consolidated net sales increased 6.5% to $6.9 billion. For the second quarter, the company estimates net sales to range from $6.65 billion to $6.78 billion, it said in its first quarter earnings statement posted at the end of May.
“If I were thinking about making a massive change, I would probably want to do it in some sort of a staged fashion,” Brewer said. “If you swept out the entire leadership team … can you imagine the tumult that would cause for the company?
“This is a big change and it may not be the last change.”