FAMILY DOLLAR NAMES HOWARD LEVINE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Byline: Valerie Seckler
NEW YORK — Family Dollar Stores has named Howard R. Levine president, chief operating officer and a director.
The appointment, said observers, is a result of merchandising improvements Levine has made at the chain of 2,600 neighborhood discount stores.
In announcing the move Monday, Family Dollar said Levine, who had been senior vice president of merchandising and advertising, succeeds John D. Reier, who has resigned “to pursue other endeavors.”
“It was long understood that John Reier’s contract would expire in August 1997, and many of us expected this appointment to occur if Howard delivered improvements in merchandising,” said Thomas Tashjian, retail analyst at Montgomery Securities.
“Howard has done an excellent job in upgrading merchandising, and he has also brought in several merchants,” noted Tashjian, who initiated coverage of the discounter last December with a “buy” rating. “John Reier had done a very good job positioning Family Dollar as an everyday low-pricer, and I would expect him to take an excellent position elsewhere.”
The analyst added that Levine rejoined Family Dollar 13 months ago with a “personal mandate to grow the business.” Levine holds about 3 million shares of the retailer’s stock, about a 5 percent stake, which should provide him with ample incentive, Tashjian observed.
Family Dollar, based in the Charlotte suburb of Matthews, N.C., posted an 11 percent sales increase to $1.7 billion in 1996, but its profit growth has been sluggish over the past five years. Last year, earnings advanced 4.3 percent to $60.6 million, or $1.07 a share.
Tashjian estimated Family Dollar can boost earnings per share 16 to 18 percent over the next three years, assuming it achieves comparable-store sales growth of 4.5 percent and expands footage by 7 percent. The analyst expects the chain’s sharper pricing, larger consumables assortments and aggressive store remodeling plan to fuel comps. In 1996, the retailer refurbished about 18 percent of its store base.
Family Dollar aims to have 2,766 stores in operation by Aug. 31, the end of its current fiscal year.
It has stores in 38 states, but most are concentrated in the South.
The units range from 6,000 to 8,000 square feet, enabling the discounter to open in rural areas and small towns as well as urban markets.