Howard Levine is stepping down as chief executive officer of Matthews-based Family Dollar, drawing to a close more than five decades of family executive leadership at one of Charlotte’s best-known corporations.
Levine’s departure, effective Jan. 15, follows Virginia-based Dollar Tree’s acquisition of Family Dollar last summer. At the time, the company had said Levine would remain with the company for two years to assist with the integration, reporting to Dollar Tree CEO Bob Sasser.
Gary Philbin, who was named Family Dollar president and chief operating officer in July, will continue in his current role leading Family Dollar, reporting to Sasser, the company announced Friday.
Dollar Tree has said Family Dollar’s headquarters will remain in Matthews. It remains to be seen how many of the company’s approximately 1,200 corporate employees will be affected by the merger.
It was Levine’s father, Leon, who opened the first Family Dollar store in 1959 on Central Avenue in Charlotte at the age of 22 with only a $6,000 investment which represented all of his assets.
The younger Levine has been at the helm of the discount chain since 1998, growing Family Dollar’s footprint and revenues throughout the recession as other retailers scrambled to stay afloat.
But the low-cost retailer’s profits have fallen well below expectations in recent years. Family Dollar adopted a new strategy in 2011 of more frequent discounts to attract customers, a departure from its longtime strategy of being the low-price leader. The company in recent years had also started selling more consumable goods like food, paper goods and cleaning supplies — all which have lower profit margins than other goods like toys and clothes.
In 2014, billionaire activist Carl Icahn pressured Levine to sell the company, resulting in a months-long takeover drama. Dollar Tree offered to buy Family Dollar, and another rival, Dollar General also came in with an unsolicited rival bid. Family Dollar investors ultimately approved the Dollar Tree deal, which ended up with a price tag of about $9.1 billion.
Levine’s retention agreement with Dollar Tree in July 2014 called for him to stay and run Family Dollar for a minimum of two years. Dollar Tree had determined Levine had completed his role in assisting with the integration of Family Dollar, spokesman Randy Guiler said Friday.
Sasser, the Dollar Tree CEO, praised Levine’s leadership in a statement: “It was very important to me for Howard to remain with our company and to contribute to the combination of our two large organizations. He has been an integral leader at Family Dollar for more than two decades, and has accumulated a tremendous amount of knowledge and experience.”
According to a securities filing in October 2014, Levine was eligible to receive “golden parachute” payments of up to $12 million, including $5.3 million in cash and $6.7 million in stock, as part of the merger. The filing cautioned that the amount was an estimate and could change.
“I have been impressed by Dollar Tree’s commitment to discipline and execution in running a value retail business. I am confident that both the Family Dollar and Dollar Tree banners are well-positioned for many years of growth and success,” Levine said in the statement.
The combined Fortune 500 company now operates 14,038 stores in 48 states and five Canadian provinces.
Dollar Tree confirmed that Levine remains on its board of directors. Levine, Sasser and Philbin were not available to comment.
It’s not a surprise for a longtime executive such as Levine to leave a newly merged company, said Steve Cox, a marketing professor at Queens University of Charlotte.
“You’re not really part of the management team anymore even if you carry the title,” Cox said.
The Levines are major philanthropists in North Carolina. Last week, Howard Levine donated $1 million to help build a child development center on Charlotte’s west side. The project’s organizers say adding the prominent Levine name to the center is a way to raise the project’s visibility and spur more charitable giving from other businesses.