From Gap to Gamestop, a retail executive exodus is underway — and more departures are coming

Don’t expect the stream of retailers departing the C-suite to stop anytime soon.

Already this year, Gap And Bed Bath & Beyond suddenly changed its CEO as the companies’ sales plummeted. GameStop fired its chief financial officer In the midst of the video game retailer’s efforts to improve its business. After sticking around to help Dollar General deal with the pandemic, The company’s longtime CEO said he was retiring.

As the retail sector looks at an increasingly challenging landscape, experts say executive shakeups will likely become more common. Stimulus spending that boosted sales during the pandemic will no longer face any underlying business conflicts. With inflation rising, there is growing concern that buyers will withdraw from spending. And after two years of tension, some officials are ready for a change of pace.

“The retail CEO has to earn his seat and make his own money, because his job has gotten much harder over the past six months,” said John San Marco, a senior research analyst covering the retail industry at Neuberger Berman.

Wall Street is also becoming wary of the retail industry as the economic background crumbles. Shares of the S&P Retail exchange-traded fund are down about 30% so far this year, which is worse than the S&P 500’s 18% drop at the same time.

San Marco said that as pressure builds on retail executives to accelerate growth, it is more likely that they will disappoint the board and shareholders and be shown the door. In other cases, officers may see writing on the wall and want to leave while riding high.

Here are three reasons why industry executives may be looking for a new job in the coming months.

bed Bath and Beyondfor example, became the target of Chevy co-founder Ryan Cohen, whose RC Ventures acquires nearly 10% stake Company. Cohen pushed for changes, which include taking off or selling the company’s baby goods chain and slashing CEO Mark Tritton’s pay.

About three months later, Triton pushed out As sales continued to decline, losses continued to mount and inventory piled up. Sue Gove, an independent director on the board, was installed as interim CEO.

Cohen also turned up the heat GameStop After buying shares of an old brick-and-mortar videogame seller. He was tapped to lead its digital push as chairman of its board and the company received a slate of new leaders, including heroine Veteran Matt Furlong Joe Amazon became the new CEO and Mike Ricupero became its chief financial officer.

This was followed by several aftershocks – including the firing of Ricupero. earlier this monthJust a year after he was brought into the company.

dollar Tree, which was left behind by rival Dollar General, also underwent sweeping changes in its leadership after being caught in the crosshairs of an active investor. The company entered into an agreement with investment firm Mental Ridge by adding seven new directors to its board. In late June, Dollar Tree also said this New batch of leaders to be found,

kohlso Hedge fund McCallum Advisors also came under scrutiny, which pushed the retailer for months chase a sale And shake up your slate of directors. The retailer managed to re-elect its slate of 13 board directors earlier this year. but last week it Said its Chief Technology and Supply Chain Officer is departing,

David Basuk, global co-leader of retail practice at AlixPartners, said the focus of active investors on retail is increasing pressure on company boards across the industry.

“There’s a lot of worry in the third and fourth quarters. It’s not going to get easier anytime soon,” he said.

A survey of 3,000 business executives by AlixPartners this fall found that 72% of CEOs said they were worried about losing their jobs in 2022 due to disruption. This is up from 52% who said the same in 2021.

Earlier this month, Gap Told Its CEO Sonia Singhal was stepping down A new strategy backfired after the company’s Old Navy business. Old Navy, once a growth driver for the company, HAd pushed to plus size To appeal to more customers. But the effort left the chain with too many clothing in oversized sizes, and not enough sizes for customers.

Singhal was replaced as interim CEO by Bob Martin, the executive chairman of Gap’s board. Old Navy CEO Nancy Green left just a few months ago.

Luxury Resale Retailer After Struggling to Be Profitable real real It also announced in early June that founder Julie Wainwright was stepping down as CEO. Chief Operating Officer Rati Sahi Levesque and Chief Financial Officer Robert Julian were named interim co-CEOs.

As sales spiked by the pandemic, Newberger Berman’s San Marco said old leaders are being pushed out and new ones are being brought in to slash expenses and shrink brick-and-mortar footprints .

“There have been some changes in CEOs in companies that will probably be much smaller than they are today,” he said.

Victoria’s Secret Few retailers may offer a playbook, San Marco said. The lingerie retailer split from its parent company and brought in new leadership after losing customers to trendier rivals.

Last week, Company appoints executives to three new leadership roles, It also announced it was cutting about 160 management roles, or about 5% of its home office headcount, to streamline operations and reduce expenses.

Walmart is among those who have resigned after a long tenure. Former CFO Brett Biggshome depot Former CEO Craig MenearAnd most recently, Dollar General CEO Todd Vasos.

Leppard of executive search firm Hedrick & Struggles said some companies have asked executives to delay retirement over the past 18 months to help solve supply chain glitches, labor shortages and more.

Now Leopard expects more delayed retirements to be announced, with officials looking for a slower pace after being burned by the pandemic.

“The past few years have been exhausting for the CEO,” she said, adding that the departure will make room for new talent.

As the economic downturn risks, he said more boards are looking for leaders with strong track records for operational execution and financial discipline.

According to Bassuk of AlixPartners, retailers are also increasingly tapping outsiders to take their companies in new directions. For example, Walmart, pre tapped PayPal executive John Rainey, who debuted last month as the company’s new chief financial officer.

In the past, Basuk said companies would consider whether to choose executives with experience in sales or operations.

“That’s no longer an argument,” he said. “Now, companies want someone else to bring fresh thinking from the industry.”