Department store execs shuffle into discount - executive migration to discount store positions

Discount Store News, May 15, 1995 by Teresa Andreoli

BOSTON -- If Paul Revere were alive today and sufficiently possessed to gallop around North Boston and decree one message to attendees of this year's annual IMRA convention, it could be: "The department store people are coming!"

But poor Paul would be a bit late, because in the top echelons of discount department store management, the upstairs people are already here.

From glancing at the hiring activity of the past 12 months alone, two patterns seem clear. First, the amount of fresh, new-to-discounting faces are overwhelmingly rooted in department store merchandising. Second, many of the ole' familiar faces of discounting are steering ships that were considered enemy vessels this time last year. This month's annual convention of the International Mass Retail Association here will be filled with both new faces and familiar ones at new firms.

The big attraction of department store folk is due to a combination of factors.

"Historically, department stores provide the best, well-rounded merchandising training," said Kirk Palmer, president of Kirk Palmer & Associates, New York, an executive search firm that specializes in retail. But Palmer cited the parallels between the discount and department store segments as a means to explain the recent attraction.

"Both segments are multi-departmental and over the past 10 years, department stores have grown more promotional and commodity-driven. These similarities help take away some of the risks that surround a transition of a [new-to-the-industry] hire. That's a big deal, especially if there is a board of directors and stockholders to answer to," Palmer said.

Plus, the discount retail image has risen a few notches over the years, mostly due to the promise of growth.

"Generally speaking," Palmer said, "10 years ago some department store people would have turned their noses up at the discount industry, but that's no longer the case."

Consolidation in the department store segment has cost the upscale industry some of its glitter. On top of this, the savvy retail executive can't help but recognize that discount is where the American customer shops, Palmer said. Gary Witkin, the new Service Merchandise president and coo, told DSN why he left 23 years of department store retailing to join a hard lines chain.

"Priorities and shopping behavior in this country have changed. Home is more important than [apparel] fashion, but there's plenty of fashion in home furnishing," he said. "Service Merchandise is poised to serve these market trends."

Mark Cohen, Bradlees' new chairman and ceo, said one of his reasons for jumping from his post as head of Federated-owned Lazarus was the independence.

"Political madness," is one way he described his experience at the $1.2 billion department store chain, one of several companies owned by a Cincinnati-based giant. Cohen joined Lazarus as the LBO-fragmentation dust had begun to settle, and now he senses his past success at turning Lazarus around will be transferable to Bradlees.

Another draw to retailing is the promise of growth. As one example, Bradlees' sales are $600 million higher than Lazarus'.

"Senior executives are drawn to the large volume opportunities that discounting provides," Palmer generalized. "It's not difficult to be drawn to Wal-Mart's $80 billion business," he added. "My friends in the department store industry didn't realize Service Merchandise is a $2 billion retailer," Witkin said.

The popular desire to don an upscaled store image has also fueled interest in department store folks, said Dick Barzelay, president, Search Professionals, Boston. "When Bradlees, Venture, Shopko and Target decided to break away from the Zayres', they recruited from department store experience. Department stores have a better track record of training merchants," Barzelay said.

Aside from the infiltration of department store people, the shuffling of executives from one discount chain to another has been fast and furious.

Although it is not a new phenomenon, executives tend to surround themselves with trusted allies.

One example of a "together again" duo is Joe Ettore, Ames president and ceo; and Denis Lemire, executive vp. Ettore, who had spent most of his career at Jamesway, was tagged a few years ago by Stuarts, a small Franklin, Mass.-based discounter. During his one-year stint there, he met Lemire, but then Ettore was snagged back by Jamesway. Just last year, Ettore grabbed a president and ceo spot Ames, and Lemire soon gained incentive enough to move his office to the Rocky Hill, Conn., complex of Ames.

Although the trusted-ally movement can seriously shake a company, it leaves a great deal of opportunity in its wake. Currently, not all the holes in executive-level discounting have been filled.

"Most of my clients are staying searching within the industry, looking for a real merchant," said Jeffrey Conners, president of Jeffrey Allen Associates, San Diego. "Two or three years ago, people on the financial side were in demand for the top spots, but that's changed," he said.