There’s been a housecleaning of sorts at the country’s second largest dollar store chain. Late last month, Dollar Tree, Inc. announced a number of leadership changes it said would support the company’s growth and accelerate implementation of its value creation initiatives.
Chief legal officer and corporate secretary William Old, chief operating officer Thomas O’Boyle, chief strategy officer David Jacobs and chief information officer Andy Paisley have all departed. Searches for successors are underway, and the retailer said it is in advanced discussions with several candidates for certain positions.
Additionally, Kevin Wampler will transition out of his role as chief financial officer upon the appointment of a successor. Wampler will remain with the Chesapeake, VA-based dollar chain as an advisor until April 2023 to ensure a smooth transition.
“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,” stated Mike Witynski, president and chief executive officer. “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.”
Rick Dreiling, a former Safeway senior manager who now serves as executive chairman of Dollar Tree, said, “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.”
The latest Dollar Tree news comes after several developments in the past two years that put the company under pressure from investors to make changes. In September 2021, the company announced it would test higher base price points of $1.25 and $1.50 at some of its legacy stores. That change followed nearly three decades of Dollar Tree sticking to its $1 price point storewide. At the same time, the company announced it would be expanding its “Dollar Tree Plus!” in-store department offering items priced at $3 to $5 in categories such as crafts, home décor and cleaning products.
Two months later, in November, the retailer expanded the $1.25 and $1.50 price points at all of its 16,000 store nationwide. At the time, the company said the higher prices would allow it to expand its offerings and provide families with more of their essentials.
During this time period, Dollar Tree found itself facing pressure from an activist investor, Mantle Ridge LP, to replace its entire 11-person board of directors. The company pushed back, saying such a move would not be in the best interests of its investors.
Dollar Tree also faced operational problems in early 2022. In February, it was forced to temporarily shutter 400 stores after discovering a rodent infestation at one of its distribution centers. A Food & Drug Administration (FDA) inspection uncovered unsanitary conditions, including the infestation, at a distribution facility in West Memphis, AR. That warehouse permanently closed last month.
Additionally, Family Dollar, which Dollar Tree had acquired in 2015, issued a voluntary recall of some products that the FDA said might be unsafe for consumers to use due to potential contamination.
In March 2022, Dollar Tree ultimately settled with Mantle Ridge and announced the makeup of its expanded and reconstituted board. The retailer conceded to a number of Mantle Ridge’s demands, including Dreiling’s appointment to lead the board (Dreiling also serves on the board of directors for Lowe’s) and the inclusion of Mantle Ridge founder and CEO Paul Hilal as vice chairman. The board was not completely overhauled, however – five current directors stayed on, including Dollar Tree president and CEO Michael Witynski as well as Thomas Dickson, Jeffrey Naylor, Winnie Park and Stephanie Stahl. Additionally, five new independent directors were added to the board: Ned Kelly, Cheryl Grisé, Daniel Heinrich, Mary Laschinger and Bertram Scott.
Former Dollar Tree CEO and board executive chairman Bob Sasser as well as Arnold Barron, Gregory Bridgeford, Lemuel Lewis, Carrie Wheeler and Thomas Whiddon retired. With these changes, Dollar Tree’s board now consists of 12 directors overall. Since the settlement was announced, the company’s stock price has risen from $146.80 per share on March 8 to $164.84 at closing on July 5. Mantle Ridge controls just under 10 percent of Dollar Tree, including derivatives.
Before this recent management realignment was announced, Dreiling and the board were already putting their imprint on the company by naming two more former Dollar General executives to assume to leadership roles at Dollar Tree. John Flanigan was named chief supply chain officer and Larry Gatta was tapped to be chief merchandising officer.
On May 26, Dollar Tree announced a 6.5 percent increase in consolidated sales and a 48.1 percent rise in earnings per share during first quarter 2022. In making the announcement of its c-suite changes on June 28, the retailer reaffirmed the fiscal 2022 outlook provided in May and said it expects to report quarterly earnings on August 25, 2022.
