The executive chairman of Dollar Tree is resigning

Short dive:

  • Executive Chairman of Dollar Tree Bob Sasser is set to resign ahead of the company’s annual shareholders’ meeting announced the company Friday.
  • Sasser first joined Dollar Tree in 1999 as Chief Operating Officer and then served as CEO from 2003 to 2017 before taking over as Executive Chairman.
  • Upon retirement, Sasser will take the honorary title of Honored Chairman in recognition of his work in retail. His retirement, according to Wells Fargo analysts, could set the stage for a settlement with activist investor Mantle Ridge.

Diving Insight:

Sasser oversaw the massive expansion of Dollar Tree, taking the form of a permanent building of its eponymous trail as well acquisition of the family dollar in 2015. During his tenure, the company’s sales grew from $ 1 billion to more than $ 25 billion.

The entire sector has grown rapidly since the Great Recession, and the rising income inequality it has fueled, even as other retail sectors have struggled and consolidated.

Dollar stores are also not growing. By the end of January, Dollar General planned to open more stores by 2022 (1102). than any other retailer combinedaccording to Coresight Research.

This is in addition to the more than 1,000 new stores last year that Dollar General published. The planned Dollar Tree ads appeared in a distant second place in 2021 – 393, and the company’s Family Dollar banner added another 200.

The disparities in expansion between Dollar General and Dollar Tree reflect differences in performance between the two discounters. Between fiscal 2016 and fiscal year 2020, Dollar General’s sales grew approximately from From 22 to 33.7 billion dollars. Meanwhile, sales of Dollar Trees (including both banners) grew more slowly, from $ 20.7 billion to $ 25.5 billion.

Disparities continued last year, which was marked by turmoil in the global supply chain. In such an environment, Dollar Tree, which has tied itself to a $ 1 price tag for more than a generation of consumers, has had fewer opportunities to pass on to its customers higher shipping and delivery costs than Dollar General and other common merchandisers. Instead, it is affected by profits.

The Fall Dollar Tree announced this raise prices to $ 1.25 for most of its range, the move meant increasing profits, but could also scare off some buyers, especially since the increase was much higher than inflation to date.

Fighting its competitor’s long-term problems and underperformance, Dollar Tree is fighting off activist investors, including Mantle Ridge, which by December owned 5.7% of retail shares.

The company described Mantle Ridge as acting in an “unreasonably aggressive and hostile manner” after Mantle Ridge informed the company of its intention nominate a completely new board. Mantle Ridge also, according to Dollar Tree, has invited former Dollar CEO Richard Drailing to take the position of executive chairman.

The 70-year-old Saser’s departure “boosts the potential for a settlement with the activist,” Wells Fargo analysts Edward Kelly and Anthony Banadio said in a research note on Friday. They added: “This move seems to signal that the company can soften its stance by opening the door to greater change.”

https://www.retaildive.com/news/dollar-trees-executive-chairman-to-retire/619099/ The executive chairman of Dollar Tree is resigning

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