New CEO at Duane Reade; D’Arezzo resigns
NEW YORK —Manhattan-based pharmacy retailer Duane Reade has tapped former Loblaw Cos president John Lederer to serve as its new chairman and chief executive officer, an appointment viewed by some industry observers as a positive move that will position Duane Reade for growth.
Filling the top spot vacated by Rick Dreiling in late January is Lederer who, from 2001 to 2006, served as president of the Canadian supermarket chain with more than 1,000 corporate and franchise stores under various operating banners.
During his 30-year career at Loblaw and its subsidiary companies, Lederer has held many senior positions throughout the organization, including executive vice president responsible for merchandising, operations and profit performance of all Loblaw businesses in eastern Canada.
The hiring of a longtime supermarket executive from Canada may have taken some industry members by surprise, but at least one analyst sees the move as a positive, as Duane Reade works to turn around the chain.
“He was a key player in a lot of the innovation, and he was a significant contributor to that company being viewed very favorably globally as an innovative, world-class food retailer with significant growth and good market share gain,” said one Loblaw analyst.
In September 2006, there was a management shake-up at Loblaw, and Lederer stepped down as president by mutual agreement. Some viewed the shake-up as unnecessary, while others viewed it as overdue.
Lederer had been in the midst of transforming the supermarket chain to combat the threat of Wal-Mart. However, there were reportedly some snags in the reorganization of the supply system, which dealt a blow to the bottom line.
Under Lederer’s leadership Loblaw grew its reported annual sales from $20 billion Canadian in 2000 to more than $28 billion Canadian in 2006.
John’s demonstrated ability to define and guide important strategic initiatives and unit expansion programs will allow the company to accelerate its next phase of growth,” stated Tyler Wolfram, a director of Duane Reade and a partner of Oak Hill Capital Partners.
Dreiling, who left Duane Reade to take the helm at Dollar General, left in place a turnaround plan he implemented in March 2006. To date, the no-frills plan, dubbed Duane Reade Full Potential, has helped the chain improve operations and increase market share. While it is unclear at this point if Lederer will forge ahead with the plan, some observers remain confident in Lederer’s abilities.
“I have been watching with interest what has been going on post the private-equity ownership, and I have noticed some simple improvements at the store level,” said the Loblaw analyst. “Although, I would say they have a long way to go and, luckily for Duane Reade, John has the expertise in retail merchandising that I believe would bring to bear a lot on the business model.”
Just days after the Lederer announcement, Duane Reade revealed that David D’Arezzo, senior vice president and chief marketing officer, had resigned effective April 17. D’Arezzo has assumed a senior position at Houston-based Grocers Supply Co.
Since Dreiling’s departure, D’Arezzo had served as interim chief executive officer.
JPMA refutes media reports about dangers of baby bottle materials
MT. LAUREL, N.J. The media has been asked by the Juvenile Products Manufacturers Association to halt stories with claims of purported negative health effects from using baby products containing bisphenol A (BPA). JPMA claims that statements of ill health linked to items containing BPA are often misleading and frighten consumers.
According to JPMA, research has shown that when used properly, products made with BPA do not pose a health threat.
Robert Waller, Jr., the president of JPMA, said, “JPMA is extremely disappointed in the media for speculating that Health Canada’s assessment of BPA would recommend labeling the chemical a dangerous substance, when in fact the report has not even been issued yet.”
Claims in the media have stated that risk may come from the plastic shields on pacifiers, parts of baby bottles or sippy cups being broken down or chewed, and then ingested with food or saliva. Scientific findings indicate that BPA may cause estrogenic effects in laboratory animals, and so concerns about the safety of baby products, especially bottles, has been under scrutiny.
JPMA, whose mission is to educate consumers and industry professionals about juvenile products and safety, is referring consumers to its Web site, www.babybottles.org, for more information on BPA and related health findings.
American Greetings reports fiscal 2008 profit
CLEVELAND American Greetings generated $83.3 million in earnings for fiscal 2008, including $15.6 million in the fourth quarter ended Feb. 29, and more than $1.77 billion in total sales for year. Total sales were down about 1 percent from $1.79 billion the previous year, but earnings were up 96 percent from $42.4 million.
“I’m pleased we were able to achieve earnings within our forecasted range and exceed our cash flow guidance,” said American Greetings chief executive officer Zev Weiss. “Our strong cash flow allowed us to make two acquisitions in the digital photo space and repurchase shares.”