Byline: Sharon Edelson

NEW YORK--In a high-stakes game of executive musical chairs, discount store executives are trading places at a frenzied pace.
Disgruntled shareholders, impatient over prolonged bankruptcies and sluggish results, are forcing top-level changes, while other senior executives are abandoning ship for steadier waters.
Since January, more than 16 top-level executives have changed jobs or left the industry.
Just this month, Philip Otto, president of Venture Stores, said he would resign from the company in May 1995. In addition, Venture's chairman, Julian Seeherman, who is in his mid-60's, is expected to retire.
Herb Douglas, senior vice president of merchandising at Bradlees, left to join Jamesway as chief executive officer, and Bradlees ceo, Barry Berman, will soon leave his post, but he'll stick around as a consultant.
In August, Jack Burtelow, senior vice president and chief financial officer of Venture Stores, joined Ames Department Stores as chief financial officer. Joseph Ettore, president and ceo of Jamesway, joined Ames in the same capacity in June. And Denis Lemire, who was president of Stuarts Department Stores, joined Ames as executive vice president of merchandising.
The biggest raiding party may be out right now. Kmart is reportedly searching for a number-two executive to work under chairman and ceo Joseph Antonini, and possibly succeed him after a transition. Wal-Mart, Target, J.C. Penney and Sears, Roebuck will be the first stores probed.
At Kmart, Bradlees and other discounters, there are jobs available for those with merchandising skills. But the pool of talent doesn't run deep, and a search could go well outside the discount arena. For example, Kenneth W. Watson, who joined Kmart in the new position of executive vice president of marketing and product development on Sept. 22, was ceo of Little Switzerland, a small duty-free luxury goods chain in the Caribbean and Alaska. In some cases, it has taken stores several years to fill a key position.
Kenneth B. Woodrow, who was named president of the Target Stores discount division of Dayton Hudson in May, filled a post that had been vacant since 1991.
"The executive changes are part of the ongoing search for the right answers," said David Ferguson, who became president and chief operating officer of Stuarts after Lemire's departure. "People are doing lots of things to get through the clutter. Stores that have never been open on Sundays are staying open, stores that never took charge cards are taking charge cards and stores that used line art for advertising are going to color photography or TV."
"What's happening is not unlike the situation in the department store arena," said Herbert Mines, chairman and ceo of Herbert Mines Assoc., an executive search firm. "All of the smaller or regional discounters find that it's very difficult to compete with their national brethren. As they get into financial trouble they start thrashing around. They either change people or change strategies."
"The market has become crowded and saturated," said R. Fulton Macdonald, president of International Business Development. "The hangers-on are in deep trouble. When the chains are [performing] marginally, the heads roll faster."
Bradlees, headquartered in Braintree, Mass., is looking for a top merchant to succeed Barry Berman, who said he will step down as chairman and ceo when the company finds a successor. In addition, there is the gap left by Douglas.
Sam Mandell, president of Bradlees, believes the turmoil in the executive suite is not entirely a symptom of big companies such as Kmart and Wal-Mart clobbering the smaller, regional chains.
"If you go back to the Seventies and early Eighties, there was much more of a focus on merchandise," Mandell said. "Today the focus is on the customer and the logistical part of the business.
"We're now seeing an emphasis on merchandise coming back," Mandell said. "Some of our executive changes have been designed to bring people into the company that can accomplish that. We felt we needed to strengthen the merchandising arm of the business, and the best way to do that is go right to the top."
The recent shakeup at Rose's Stores stems from competitive pressures from Wal-Mart, Kmart and Venture Stores, according to industry experts.
Ed Anderson, executive vice president of finance, was promoted to president and assumed the title of chairman after Lucius Harvin III, Rose's chairman, resigned suddenly. George Jones, the company's president, left to join Warner Brothers Worldwide Licensing.
"Rose's is a company that's had very serious trouble," said Kurt Barnard, retail consultant. "There was pressure from the board and from vendors, who wanted to get paid."
The chain said it plans to emerge from Chapter 11 bankruptcy early next year.
In discounting and other retail sectors, many of the same players keep resurfacing at different companies because the list of qualified applicants is short.
"To find a good executive, you have to raid another company," said Barnard. "That's exactly what's happening. Ames raided Jamesway and Jamesway raided Bradlees."
"The retail industry has been very bad at the training and development of managers for many years," Mines said. "The pipeline keeps getting thinner."
According to Mines, retailing is one of the few industries that does not recruit midlevel marketing and merchandising executives from other fields. Meanwhile, almost every other industry recruits retailers, diminishing the talent pool.
Jack Smailes, executive vice president of merchandising at Hills Department Stores, had his own point of view of the recruitment process.
"Most of my career was with Federated," he said. "At Federated, we did a great job of training people, and we do a great job at Hills.
However, Smailes added that retailing "is like baseball."
"If you have a good season, you're sought after. If you have a bad season, you get traded."

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus