NEW YORK — Philip G. Otto will resign as president and a director of Venture Stores Inc. on May 19, 1995, to pursue opportunities outside the retail field.
“After more than 20 years in retailing, I have decided to pursue other interests,” Otto said in a statement Tuesday. “I’m making my intentions known now to contribute to a smooth transition.”
Venture, based in O’Fallon, Mo., has been doing well in Texas, a relatively new territory for the discounter. It has been struggling in other trading areas, however, because of stepped-up competitive pressures from such giants as Wal-Mart Stores, Target Stores and Kmart Corp.
Second-quarter earnings at Venture plummeted 73.8 percent despite a sales growth of 9.1 percent for the period ended July 30, as reported. Analysts blamed the drop on difficult regional economies and on competition from the Big Three discounters and their supercenter formats.
Observers don’t see Otto’s resignation as a sign of trouble at the retailer.
Kurt Barnard of Barnard’s Retail Consulting said the announcement is being made now to “clear the air in advance so that there are no internal problems.”
Isaac Lagnado, a principal with Tactical Retail Solutions, a consulting firm, said, “It’s a little bit of a surprise, but there has been some buildup of negative news lately. “Fundamentally, the company is in good shape. It has one of the best expense ratios in the industry and is managed by the numbers. “But there’s a lot of competitive pressure in the Midwest, perhaps more than any other region,” he said.
Julian M. Seeherman, chairman and chief executive, said in a statement, “We appreciate the role Phil has played…and we wish him the best in his new endeavors.”
Through a spokeswoman, Seeherman declined to comment further on Tuesday, and Otto could not be reached.
Seeherman is part of a three-person search committee, along with board members Robert L. Berra and H. Edwin Trusheim, to find a successor to Otto. In addition, the board hired Spencer Stuart, a search firm here, to assist in the process.
Otto joined Venture in 1969 in data processing. At the time, Venture was owned by May Department Stores Co. In 1973, he became controller of Kaufman’s, another May Co. unit, but rejoined Venture in 1976 as senior vice president of finance and operations. He was named executive vice president of that area in 1979, and executive vice president of administration in 1982.
From 1984 to 1986, he was chairman of Meier & Frank Co., a May Co. division. He returned to serve as Venture’s chairman from 1986 to 1990, and was named president in 1990. Venture was spun off as an independent company in November 1990.
Venture operates 109 discount retail stores in the Midwest. Its stock closed at 17 1/4, down 3/8 on the New York Stock Exchange Tuesday.