More execs leave Hechinger

Home Channel News, May 24, 1999 by Monica Toriello

Vp-operations Greg Jones and vp-DMM Warren Martin resign

LARGO, MD. -- Turnover within the ranks of Hechinger's senior-level management continued to escalate over the last few weeks with the departure of two key executives. The resignations were submitted as the 206-store chain struggles with retail fundamentals and improving the productivity of its stores.

Greg Jones, who oversaw more than 70 stores as vp-operations of the company's Division II, resigned May 4. Jones was with Hechinger less than a year.

"I needed to get my peace of mind back," he told NHCN. "The company has lots of challenges ahead of it, and I think it deserves [a divisional vp] whose heart is in it." Jones said he will use the next few weeks to be with his family, enjoy his new house in San Antonio, and play golf, but that he will soon he in business for himself. Hechinger has named Steve Hastings, most recently vp-store planning, as Jones' replacement.

A week before Jones informed Hechinger he was leaving, Warren "Gorky" Martin, a 12-year Home Quarters veteran, resigned as vp-divisional merchandise manager (DMM). According to a source from Hechinger, Martin told his colleagues the job was "destroying his health."

Martin is the third vp-DMM to have left the company over the last few months. Hechinger has since reorganized its merchandising team, moving operations executive Mike King into the merchandising side and promoting merchants Craig Webber and Scott McCallum into vp positions. A replacement for Martin had not been named as of May 11.

But Hechinger's chief operating officer Don Stallings claimed that finding people has not been a problem.

"We have no headhunters recruiting for us at this point, and we've received six to eight unsolicited resumes from executives in the last 45 days," Stallings said in early May, adding that he is pleased with the caliber of people that Hechinger is attracting. "I think they see things happening in the company that look more favorable."

What exactly those "things" are remains a question, according to frustrated vendors who report inaccessible merchants and slow payments. To date, Hechinger has remodeled one-fifth of its stores, but will not remodel any more until after the summer.

During the next three months, the company will concentrate instead on "enhancing operational procedures," according to Stallings. These include ramping up its customer service initiatives, enabling the stores to order product through Telxon scanners, and monitoring its cross-docking facility in Elkton, Md., which is currently in testing mode and handling about 5,000 cartons a day of mostly slow-turning items. Stallings also conceded that there are still items at the stores with more than one sku number, and he said Hechinger is working toward achieving sku uniformity.

On the merchandising side, Hechinger will be conducting extensive line reviews, examining assortments and tweaking planograms. Stallings said that there will be "no more big experiments" with new categories.

"We are going to concentrate on improving productivity," be said. "That's a lot of work. That's probably more than we can do over the next year, but we expect to start seeing results within nine to 12 months."

But because the company will be expending all of its energy on simply doing the basics, a strategy for differentiation won't come until much later. "In about 18 months, we will begin to strategize our differentiation factors," said Stallings. "First, we have to gain back the market share that we lost because of our own ineptness."

Stallings believes this can be achieved just by keeping the stores in stock, having helpful and knowledgeable staff and carrying the right merchandise.

Stallings disputes critics who insist Hechinger doesn't have a year and a half to come up with a differentiation strategy. He said that other companies in the industry have taken longer to turn around.

Some of the steps Hechinger has taken have made an impact on the chain's financial picture, Stallings noted. Its use of crossdocking has given the company "extra breathing room" by freeing up money that would otherwise have been tied up in inventory. Remodeling stores has produced "dramatic" comp increases, he said. And commission-based selling in the kitchens, flooring and seasonal departments in its medium- and high-volume stores has "significantly" increased sales.