NEW YORK — Rick Leto has landed himself a new gig.
A former top merchant at Kohl’s, who spent a short time at Galyan’s this summer before the chain was sold, is joining Mervyn’s as president and chief merchandising officer.
Leto, who left Kohl’s 10 months ago, will officially join the Hayward, Calif.-based chain in January. “The winters in Wisconsin are just too cold,” he said in an exclusive interview on Tuesday, referring to his home near Kohl’s headquarters in Menomonee Falls.
Leto was executive vice president and general merchandise manager of apparel and accessories at Kohl’s and a key player in that chain’s explosive growth during the Nineties.
He joined the chain in 1996, but left last March, following a difficult 2003, marked by merchandise problems and margin erosion. Prior to Kohl’s, he was a senior merchant at Macy’s East. He’s a 31-year veteran of retailing.
At Mervyn’s, he undoubtedly will face significant challenges carving a niche in the competitive West Coast market. Formerly a division of Target Corp., Mervyn’s was sold this summer to a group of investors led by Sun Capital Partners Inc. and Cerberus Capital Management LP for $1.2 billion in cash. The total price tag is about 10 times Mervyn’s pretax profits of $160 million. Target also named Lubert-Adler/Klaff and Partners LP as part of the “investment consortium” buying the nameplate.
Leto said the new owners are “trying to rebuild the company and are putting together a new management team, which I said I would lead for them.” There is no chairman or chief executive officer at this time, Leto said, adding that he expects that slot to be filled eventually.
Leto said he believes Mervyn’s still has a niche on the West Coast as a regional player, and with effective merchandising and marketing can compete with J.C. Penney, Kohl’s and the other midmarket retailers.
Leto said he will spend his first 30 days trying to “figure out what’s going on” at the company before making any significant moves. “But I believe Mervyn’s has tremendous viability on a regional basis,” he said. Before it was sold, Mervyn’s had been struggling with shrinking profits and market share amid tough competition from other discounters, department stores and mass merchants, including Kohl’s, Wal-Mart and Federated Department Stores.
Mervyn’s operates stores in 13 states, mostly in the West and South. Its sales in 2003 were $3.6 billion.