- Four of Dollar Tree’s top executives are out of the company, and another is on the way out, following an activist investor-led revamp of its board.
- Those gone already are Chief Legal Officer William Old, Chief Operating Officer Thomas O’Boyle, Chief Strategy Officer David Jacobs and Chief Information Officer Andy Paisley. Dollar Tree said in a press release that searches for successors are currently underway, with some candidates in advanced discussions.
- Chief Financial Officer Kevin Wampler is also leaving. He will transition out of the role once his successor is appointed and stay on as an advisor until April 2023, Dollar Tree said.
Dollar Tree just cleaned house. The departures include key operating and financial executives, as the company’s newly remade board sets about trying to transform the dollar store chain.
In March, the company announced a new executive chairman in Richard Dreiling, a former CEO of Dollar General, who was handpicked by activist investment firm Mantle Ridge. Paul Hilal, Mantle Ridge’s CEO, was appointed as vice chair, and Mantle Ridge’s other director picks were added to the board as well.
That alone was a huge leadership makeover. It followed Mantle Ridge’s swift and successful activist campaign and the retirement of former executive chairman and longtime Dollar Tree presence, Bob Sasser, whose departure paved the way for Mantle Ridge’s board takeover.
One of the few officials to survive is CEO Mike Witynski, who said of his colleagues’ recent departure, “As we look to the future, I believe these changes within our leadership team will bring new perspectives and experiences that will help accelerate our continued growth and deliver even greater value for our shareholders, customers, employees and suppliers.”
Dreiling also added comment to the announcement: “Our Board is fully aligned with Mike that now is the right time to bring in new leadership to ensure the Company remains on a strong trajectory.”
While consistently growing in sales and footprint, Dollar Tree has long underperformed against its biggest rival in the deep discount space, Dollar General, while also struggling to capitalize on its massive acquisition of Family Dollar.
Sales were up 6.5% in the company’s most recent reporting period, with gains in the Dollar Tree banner driving an increase in operating income. It raised forecasts for fiscal year estimates for sales and profits, potentially given a boost by price-conscious customers in an inflationary environment.
Over the past year, Dollar Tree’s profits have been squeezed from ocean freight increases and supply chain bottlenecks. With its historical $1 price ceiling, increased costs have had a disproportionate impact on the company. Though not the stated reason, Dollar Tree’s rollout of $1.25 prices on a majority of its assortment last year could help it hold on to margins amid cost inflation, as could other experiments with higher prices.
The company is also still wrestling with the legal, financial and reputational fallout from a rat-infested distribution center in Arkansas that triggered the temporary closure of more than 400 stores and ultimately led the the permanent closure of the facility, along with a host of class action lawsuits.