The Retail Power 10
Some are entrepreneurs who built their companies from the ground up, turning one idea into a billion-dollar global empire. Some came up through the ranks, earning the trust and admiration of those around them with each passing year. And still others came in later — hired guns — bringing with them an expertise and skill set that sets them apart. All are alike in their ability to create new opportunities and take their businesses to the next level — no easy feat in today’s marketplace.
We call this select group of leaders “Retail’s Power 10.” Determined and ambitious, these executives continually look beyond the day to day and see a much larger picture. It’s that vision that helps them — and their companies — succeed in today’s fast-changing world.
To qualify for our list, we set a few simple ground rules: The individual must be chief executive of a U.S.-based retail company and be regarded as an industry leader.
Wal-Mart Stores Inc.
Appointed CEO of the world’s largest retail company in February 2009, Michael Duke quickly proved himself not afraid to make the tough calls, from scaling back the chain’s overambitious SKU rationalization program to reshuffling top executives. The 15-year Wal-Mart veteran (previously, he spent 23 years with Federated Department Stores and May Department Stores) is, by all accounts, low-key, friendly and unassuming, with a penchant for problem solving and strategic thinking. An industrial engineer by training and a self-confessed retailer at heart, the 60-year-old Duke loves the details of retail. Nothing escapes his attention when he makes a store visit.
A strong believer in Wal-Mart’s ability to make the world a better place to live in, Duke hasn’t shied away from social issues and has stepped up the chain’s philanthropic profile. And he has proven himself every bit as “green” as predecessor Lee Scott, launching ambitious sustainability initiatives that involve players as diverse as local farms and government and university leaders.
Although the Wal-Mart chief thrives on dealing with the nitty-gritty, he keeps his eye on the prize as he seeks out ways to grow his enormous company in a post-recession environment. Opening stores is one part of the strategy. Becoming a power player in e-commerce is another. International expansion is also key. Indeed, Duke’s drive to turn Wal-Mart into a truly global company — and the extent to which he succeeds — will likely determine his legacy and, in all likelihood, Wal-Mart’s itself.
Gregg W. Steinhafel
When it comes to mass merchandising that is both stylish and affordable, Gregg W. Steinhafel leads the company that has hit the bull’s eye more often than any other retailer.
Over the last 30 years, Steinhafel has progressed from a trainee in the merchandise aisles of Target Corp. to the top seat in the boardroom. He became president and CEO in May 2008, in the throes of the longest-lasting recession since WWII. Steinhafel has faced up to a number of challenges in his short tenure, from steering his company safely through the turbulent economic climate to overcoming a proxy fight with activist investor William Ackman. Through it all, he kept his focus on Target’s point of distinction: its merchandising. The decision to expand the chain’s food offerings and bring in more fresh produce has fueled rising sales.
Asked about his key accomplishments during the last couple of years, Steinhafel, 55, told Chain Store Age he is extremely proud of the “tremendous amount of resilience” demonstrated by his team throughout the economic crisis.
His vision for Target includes smaller-format stores with an edited merchandise assortment to cater to dense urban markets where real estate options are typically constrained, as well as international expansion. Within three to five years, he will likely lead Target across the border into Canada, Mexico or Latin America.
For all his accomplishments, Terry J. Lundgren may be best remembered for this: making the department store relevant again to American shoppers. Tall, debonair and precisely tailored, Lundgren, 58, has breathed new life into the format, updating stores and bringing in exclusive brands and celebrity names to give Macy’s an edge. From Martha Stewart’s home furnishings collections to Madonna’s Material Girl line, exclusive brands and store labels now account for some 42% of the chain’s revenues.
Long known for his fashion savvy and engaging manner, the Southern California-born executive has also emerged as a tough negotiator and determined businessman in recent years. Lundgren took heat from some shoppers when, after orchestrating Federated Department Stores’ $17 billion acquisition of May Department Stores in 2005, he went on to rebrand the entire portfolio as Macy’s (only Bloomingdale’s kept its nameplate). But he held his ground, confident in his belief that a national brand would have greater clout with vendors and designers, open up new and more compelling advertising and marketing opportunities and result in more centralized (and less costly) operations.
Lundgren was not only proved right, but he also showed his critics that local tastes can be accommodated in a national chain. In 2008 he unveiled My Macy’s, a program designed to tailor a portion of merchandise to local market preferences. The localization initiative is seen as key to Macy’s improved performance and revitalization. At press time, the year 2010 was shaping up as one of the best for the company, with its stock up considerably. Sales and profits climbed steadily in the first three quarters of the year, with same-store sales up 4.9% and total revenue up 7%.
Best Buy Co. Inc.
When 50-year-old Brian Dunn took the reins of the world’s largest consumer electronics chain in June 2009, the sector was in one of its biggest slumps ever. But Dunn, a Best Buy career man who started his long climb up the corporate ladder as a store associate in 1985, fought back aggressively, revamping stores at home while driving expansion abroad, re-energizing the company’s consumer-focused and employee-empowering customer-centricity model and opening Best Buy Mobile shops at malls nationwide.
More than anything else, however, it is Dunn’s “connected world” strategy, which leverages the growing interplay between televisions, computers and mobile phones, that has set the tone for his watch and Best Buy’s future. Under Dunn, the chain has emerged as a true digital power player — expanding its digital content delivery services and even launching its own mobile service, Best Buy Connect.
Dunn never went to college. Instead, as he likes to say, he studied at the “University of Retail.” It’s an education that has served him well. Friendly, outgoing and accessible, Dunn has no airs. The chief executive has a straight-talking, shirt-sleeve management style that is remarkably refreshing. He is an enthusiastic cheerleader for Best Buy and a strong believer in the power of technology to help people. Equally strong is his belief in the power of Best Buy and its associates to unlock the promise of that technology for consumers around the globe. It is both the chain’s biggest challenge and biggest opportunity — and one Dunn is clearly ready to take on.
Myron “Mike” Ullman
J.C. Penney Co. Inc.
The very definition of a seasoned retail veteran, Myron “Mike” Ullman, 63, still shows the same drive to win as someone new to the starting gate. Credited with creating a more upscale image for J.C. Penney, Ullman has lifted the chain’s fashion quotient considerably with exclusive brands. In a big coup, Penney inked a deal with MNG by Mango, a European fast-fashion line. And this past fall, Penney became, for all intents and purposes, the only U.S. retailer to sell Liz Claiborne and Claiborne merchandise. The chain credited a strong reaction to its newest exclusive brands with helping boost earnings 62.3% in its most recent third quarter.
Ullman has never let Penney’s storied past get in the way of its future. In 2009 he discontinued the company’s Big Book catalogs, and in 2010 he took the company out of the mail-order catalog business altogether. Under Ullman’s watch, the company has embraced the Internet. It recently announced plans to collaborate with Hearst Magazines on two new online ventures that will launch in the summer of 2011.
The digital initiatives were the first two projects from the company’s new Growth Brands Division. Dedicated to pursuing high-potential opportunities, the new unit reflects Ullman’s determination to not only keep growing the 98-year-old Penney, but to keep diversifying its revenue and maintain its relevance. Most recently, the new division announced it would enter the men’s big and tall business, opening 300 stores under The Foundry Big & Tall Supply Co. banner during the next five years.
Jeffrey P. Bezos
Challengers — and they are legion — be warned: It will take a lot to unseat Jeff Bezos from his throne as the king of online retailing. With a degree in electrical engineering and computer science from Princeton University, Bezos envisioned early on the Web’s vast potential and harnessed its virtual power into retail reality, founding Amazon.com in 1994. Today, it ranks as the biggest online retailer on the planet. Many also rank it one of the best-run companies in America — one admired for its laser-like focus on the customer, financial discipline and willingness to invest for the long term. Despite an influx of new competitors, Amazon has grown its revenue base by an average of nearly 32% per year over the last decade.
A large part of the company’s success lies in the fact that Bezos, 46, keeps pushing — embracing invention and emerging technologies and challenging competitors. Most recently he announced Amazon’s “Kindle for the Web,” which allows Kindle books to be read on browsers on any machine, with no need for additional software. His Kindle store already is the most successful in the e-book business.
The restless Bezos continually grows the breadth and depth of Amazon’s reach by investing aggressively in other e-commerce ventures, such as livingsocial.com, an online retailer of experiences, entertainment and services that Amazon recently injected $175 million into. And he’s just as interested in non-digital ventures. In November, Amazon bought Diapers.com.
When Howard Schultz returned to the CEO position at Starbucks Corp. in January 2008, he set out to engineer a turnaround at the company he had built from a local business into a multibillion-dollar operation. Flash-forward to the present — the coffee giant not only has all its engines revving, but is solidly positioned for future growth. Sales are up and so is the stock. Equally important, even the company’s critics concede the chain has got its mojo back. To say Starbucks regained its momentum underestimates the extent of its comeback.
Schultz, 57, re-energized employees, shareholders and customers, navigating the brand through the financial crisis and making hard decisions, including closing stores and virtually halting expansion. Acknowledging the harsh economic climate, he introduced discounted prices. And he brewed up ambitious long-term strategies, including growing the consumer products side of the business — most notably with Via instant coffee — and escalating international expansion. Schultz has made no secret of his desire for Starbucks to be a global force, particularly in China where he expects to have 1,500 stores by 2015. The company will open 500 outlets this fiscal year, 400 of which will be outside the United States.
John P. Mackey
Whole Foods Market Inc.
Retail revolutionary and Renaissance man John Mackey, 57, has never been one to mince words about causes he deems significant, however controversial. What sometimes gets lost amid all the chatter, however, is Mackey’s razor-sharp retail acumen. It is Mackey more than anyone else who turned the niche concept of healthful and organic foods into a mainstream trend — and a necessity offering for even the most conventional supermarket, including Walmart. More than a health foods advocate, Mackey proved himself to have an innate talent for playing up the romance and theater of food. It was a strategy that played well in boom times.
The recession brought the high-flying Whole Foods down to earth as consumers cut back on spending. But under Mackey’s watchful eye, Whole Foods retooled its strategy, lowering some prices, expanding its private brand, slowing down expansion and opening smaller stores. He also infused the chain with a renewed purpose by re-emphasizing Whole Foods’ mission of healthy living. It was a change that was in sync with the times.
To Mackey’s credit, Whole Foods has regained its footing. Its stock is up, and it has four consecutive quarters of positive same-store sales under its belt. The chain also is gearing up for more new-store growth, both on the domestic front and in the United Kingdom.
Dollar General Corp.
Value players have thrived the past couple of years — just ask Richard Dreiling. As CEO of the extreme-value Dollar General, Dreiling, 55, heads up one of the nation’s fastest-growing retail companies. He took the reins of Dollar General at the start of 2008, after a turnaround role at Duane Reade, and hasn’t missed a beat since — from ramping up the chain’s private-label offerings to spearheading the company’s re-emergence as a public entity in 2009. With Dreiling at its helm, Dollar General has introduced a new prototype that provides a vastly-improved shopping experience, with wider aisles, upgraded décor, better sight lines and more enticing displays. It’s not upscale retail, but it’s not bargain basement either. Food offerings have been expanded. The chain is testing beer and wine sales in select markets.
With more than 9,000 stores in 35 states, the Dollar General portfolio is considerable. But Dreiling sees plenty of room for growth. The chain is stepping up its expansion this year with plans to open 625 stores, some in the new markets of Connecticut, New Hampshire and Nevada, and remodel an additional 550 locations.
Francis (Frank) S. Blake
The Home Depot Inc.
Unlike leaders recognized for accomplishments in building companies based on passion or vision, Frank Blake is among the most powerful retail leaders because of his ability to remodel a company that was in need of substantial repairs.
When he assumed the role of chairman and CEO in 2007, The Home Depot’s reputation was in shambles. Public perception said the home improvement giant cared about its shareholders, not its shoppers and certainly not its employees.
Even as the housing market collapsed and the economic crisis spread, Blake managed to focus the company’s priorities and convince consumers to give the team wearing orange aprons a second chance to impress them.
Last month, Blake, 60, outlined the company’s strategic focuses for the coming year. Customer service topped the list, followed by product authority, disciplined allocation of resources and “interconnected retailing,” a reference to the company’s commitment to enhance the shopping experience across all channels.
More Power Players
Chain Store Age limited its coverage of the most important retailers to 10 individuals. But here are some more powerful chiefs to watch in the coming year:
• Gregory D. Wasson, CEO, Walgreens and Tom Ryan, CEO, CVS Caremark: Both of these drug store chiefs (and former pharmacists) are forging new paths and alliances as they prepare their chains for the new healthcare landscape and the nation’s large aging demographics.
• Carol Meyrowitz, CEO, TJX Cos.: As the leader of the largest off-price retail organization in the United States, she has proved herself to be totally in sync with her customers and their needs. The company will debut a new (reportedly smaller-footprint) off-price concept in the spring.
• Millard “Mickey” Drexler, CEO, J. Crew Group: After turning J. Crew into one of the hottest upscale, affordable fashion brands around, Drexler expanded the company’s retail portfolio with Madewell, kids shops and men’s-only stores. Now he is putting $100 million of his own stock into a proposed private-equity buyout of the group.
• Michael Balmuth, CEO, Ross Stores: The chief of the nation’s second-largest off-pricer apparel retailer has delivered strong sales and earnings increases throughout the downturn while operating the business on lower inventories. With almost no debt and 990 namesake stores in 27 states, the company still has plenty of room for growth and new markets left to conquer.
• Glen Senk, CEO, Urban Outfitters: With five eclectic brands under one umbrella and more to come, Urban Outfitters has grown into one of the industry’s most unique and successful specialty-store retailers. Industry experts credit Senk, chief executive since 2007, for steering the company safely through the downturn (in fact, Urban flourished relative to many other businesses) and maintaining its signature creative edge. Items on his agenda include more international expansion, more social media and more domestic stores. Also in the works: a wedding brand.
• Bob Sasser, CEO, Dollar Tree: The chief executive of the country’s largest single-price retail format has tapped into the nation’s new value mentality. Under Sasser’s watch, Dollar Tree has grown like a weed (it’s up to some 4,000 stores in 48 states) and is now looking beyond U.S. borders. The chain recently finalized the acquisition of Canada’s Dollar Giant Store Ltd., a strategic move that will help jumpstart its expansion in Canada. Mexico is reportedly next on its radar.
• Kevin Mansell, CEO, Kohl’s Department Stores: When many retailers wallowed in gloom during the worst of the recession, Kohl’s Mansell seized the opportunity, opening new stores and remodeling existing sites at a steady pace — and gaining market share in the process. Mansell is also credited with expanding the chain’s well-received exclusive-brands lineup. The newest additions to the mix are two multi-department brands from entertainers Jennifer Lopez and Marc Anthony. Featuring apparel, accessories and other merchandise, the brands are set for a fall 2011 launch.