Dollar General CEO to retire during time of transition for industry
06/27/2014 6:13 PM
06/27/2014 8:16 PM
Dollar General Corp. Chief Executive Officer Rick Dreiling plans to retire in 2015, sending the company on a search for a new leader at a tumultuous time for the dollar-store industry.
Dreiling, 60, plans to step down as CEO by May 30 of next year or whenever an successor is hired, according to a statement Friday. He intends to remain as chairman during a transition period following the appointment of a new CEO.
Since Dreiling took the helm in 2008, Dollar General’s annual sales have risen 80 percent to $17.5 billion while its store count has grown 38 percent to more than 11,000. Other chains haven’t done as well, putting pressure on the industry to consolidate. Dollar General is seen as a potential acquirer of Matthews-based rival Family Dollar Stores, which billionaire investor Carl Icahn has said should put itself up for sale.
“(Dollar General) stock had gone up a lot on the speculation they would take over Family Dollar – it couldn’t be possible if he’s leaving in a year,” Joan Storms, a Los Angeles-based analyst at Wedbush Securities, said in an interview. “Then it takes maybe a year to find a successor and they have to fit into the role first, so by that time Family Dollar may be long sold.”
Tennessee-based Dollar General plans to conduct an internal and external search for a new leader.
Investors may also be worried about Dollar General’s performance under new leadership as the retailer’s target customer faces economic challenges, Storms said.
“When you have a change in leadership, sometimes there’s missteps,” she said. “At a time when they’ve really unlocked the low-hanging fruit, now it’s going to be a little more challenging to continue to make the business grow the way it has.”
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