Lowe’s new CEO Marvin Ellison is shaking up the executive team, eliminating the positions of COO, chief customer officer, corporate administration executive and chief development officer, and shifting those responsibilities to other senior executives reporting directly to him. Changes are effective immediately, but will require a transition period until all roles are permanently filled, according to a company press release.
One addition to the team is Chervon North America president and CEO William P. Boltz (who also previously held leadership roles at The Home Depot and Sears) as executive vice president of merchandising, responsible for merchandising, marketing, digital and data analytics and customer insights, effective Aug. 15.
Several executives are leaving, including Chief Customer Officer Michael P. McDermott as of Nov. 6; COO Richard D. Maltsbarger, effective immediately; and CFO Marshall A. Croom, effective Oct. 5. New roles have also been created and are yet to be filled, including executive vice president of stores and executive vice president of supply chain.
Lowe's is under pressure as rival The Home Depot casts its shadow ever wider even as the economy continues to favor home improvement sales.
Both players have benefited from a robust housing market and remain relatively insulated from the ongoing encroachment of e-commerce on their market share and sales. The home improvement sector is among the healthiest in retail, and Moody’s Investors Service analysts at year’s end said they expect that to continue.
But while serving up decent sales, Lowe's remains relatively weak compared to the competition, and its organizational changes began well before those announced Tuesday or even the arrival of Ellison last month. The company announced in January it would cut 2,400 jobs across its 285,000-employee U.S. workforce, and early this year shook up its board in the face of activist investor pressure. Around then, Marshall Croom, a 20-year Lowe’s veteran, was named CFO following Robert Hull Jr.’s departure, and Jocelyn Wong, a former Family Dollar executive who joined Lowe’s in 2015, was named chief marketing officer.
In announcing the latest makeover of the executive suite, Ellison said the retailer had "taken a fresh look at our organizational structure and are realigning our leadership team to improve our focus, better leverage Lowe’s omni-channel capabilities and deliver increased value for our customers, associates and shareholders."
The company has lately pushed hard into new technologies to enhance the consumer experience, including robots, virtual and augmented reality, and a partnership announced in November with customer engagement startup b8ta to feature smart home and other devices in a store-within-a-store model. But so far none of that has helped push up sales and traffic numbers much.
First quarter net sales rose 10.7% to $16.9 billion and comparable sales rose 1.9% company-wide and 2% in the U.S., which Neil Saunders, Managing Director of GlobalData Retail called "perfectly respectable."
"Home Depot still has the edge when it comes to brand visibility with customers undertaking bigger hard-improvement projects — something that has served it well over the past few months," Saunders said in comments emailed to Retail Dive earlier this year. "To be fair, Lowe's is not completely deficient in these areas, but it does play second-fiddle to its bigger rival."