Eight months into his role as CEO and with a new merchandising organization in place, David Campisi is following a familiar blueprint to reinvigorate the performance of Big Lots — making hard choices to streamline operations, implementing new merchandising strategies and lowering near-term expectations.
Each of these situations was evident after Big Lots reported third-quarter results which saw consolidated same-store sales fall 2.5% during the third quarter ended Nov. 2 and the company reported a loss from continuing operations of $9.5 million, or 17 cents a share, compared to a loss the prior year of $6 million, or 10 cents a share.
The operator of more than 1,500 U.S. stores now expects fourth-quarter same-store sales to decline in the low- to mid-single digits and total sales are expected to fall between 6% and 8%, although much of that decline is due to the comparison of a 13-week 2013 fourth quarter to a 14-week 2012 fourth quarter. To improve matters in 2014, the company decided to shed its 73-unit Canadian business which was acquired in 2011 and has a new merchandising and marketing organization pursuing a range of initiatives to generate traffic and increase transaction size.
“Throughout the last two years, we have invested in this business and our team in Canada has worked diligently to turn it around,” the company offered in a statement. “However, we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated and believe that the significant further capital investments and execution risk associated with continuing to pursue a turnaround would not be in the best interests of our company and shareholders.”
To improve its fortunes in the U.S., CEO Campisi has restructured much of the senior leadership team in recent months and tempered expectations for sales and profits enabling the company to begin the new year with a relatively clean slate.
Campisi, himself a veteran retail executive with a background in merchandising, joined Big Lots eight months ago after holding senior leadership roles at the Sports Authority, Kohl’s and Fred Meyer. One of his first moves was to bring in Andrew Stein in late October to serve as chief customer officer. Stein is tasked with leading the retailer’s marketing efforts, changing the way Big Lots communicates with customers and driving engagement with new shopper segments via social media. Stein came to Big Lots from Kmart where he served as chief marketing officer and led the development of innovative strategies.
The hiring of Stein was followed up with the appointment of Richard Chene as chief merchandising officer one month later. Chene joined Big Lots from the Kitchen Collection where he served as CEO, but his prior experience includes senior merchandising roles at retailers as diverse as Petco, Sears Holdings, Giant Eagle and May Company.
More recently, the company restructured its merchandising group with two new hires and the promotion of a relative newcomer who are aligned in three key areas of food and consumables, furniture and home décor, and seasonal, toys and electronics. The company promoted Trey Johnson, who had recently joined Big Lots as a divisional merchandise manager of food in August, to the role of SVP/GMM of food and consumables. Prior to Big Lots, Johnson held merchandising roles with Family Dollar, Sears Holdings, Walmart and SuperValu.
Overseeing the furniture and home décor area is Martha Withers who was hired as SVP/GMM after serving in merchandising roles at Stage Stores, Stein Mart and May Department Stores. Lucy Cindric was hired as SVP/GMM for seasonal, toys and electronics after holding merchanding roles with Stage Stores, Walmart and the May Company, Foley’s and Dayton Hudson department store chains.
“Our new management team remains focused on identifying the best opportunities in the U.S. to serve our target customer in a manner that brings value to our customers, shareholders and associates,” the company said in a statement. “The strategic decision to exit Canada will enable us to focus our resources on introducing e-commerce and omnichannel capabilities, rolling out coolers and freezers to our chain of stores, launching a furniture financing program, significantly realigning our merchandising organization, and moving swiftly to implement our ‘edit to amplify’ merchandising strategy. These bold steps forward all possess the singularly focused goal of strengthening the Big Lots brand and reinvigorating our U.S. business."