MINNEAPOLIS - Supervalu here last week selected a mix of talent from within its own organization and from Albertsons' existing staff to run the combined companies as they close in on their merger.
Analysts said the choices appear to support Supervalu's preference for a decentralized management structure, and they also said some of the executives will face a steep learning curve in their new posts.
Jeff Noddle, Supervalu's chairman and chief executive officer, said the appointments, all of whom report directly to him, "reflect the best blend of strengths needed to make the new Supervalu a national retail powerhouse."
Some of Albertsons' top management personnel will not remain with the combined companies, including Paul Gannon, Bob Dunst, John Sims and Felicia Thornton, all of whom are scheduled to leave the month after the acquisition is completed, Supervalu said in a filing with the Securities and Exchange Commission. As previously reported, Larry Johnston, chairman, president and CEO, Albertsons, will also leave once the merger has been completed.
The new management personnel named last week include Albertsons veterans Duncan MacNaughton, who will oversee companywide merchandising and marketing functions after serving a similar role for Albertsons; Kevin Tripp, who currently runs Albertsons' drug store division and will oversee retail operations in the Midwest; and Pete Van Helden, Albertsons' California president, who will oversee retail operations in the Western U.S. The Supervalu executives named to the team are David Boehen, executive vice president overseeing legal, real estate, corporate development and government affairs; Mike Jackson, president and chief operating officer; John Hooley, executive vice president, Supervalu, and president, Retail East; Pamela Knous, executive vice president and chief financial officer, Supervalu, with responsibility for Bristol Farms; and Dave Pylipow, senior vice president, human resources.
Analysts were largely supportive of the choices, although some expressed surprise at the departure of Gannon, the former president of Albertsons' Shaw's division who last year was named executive vice president, marketing and food operations, at Albertsons' Boise, Idaho, headquarters.
"This absence appears to be a Supervalu decision and could hurt management depth," said John Heinbockel, analyst, Goldman Sachs, New York, in a research report. He said he thought Gannon had "done a decent job" as top merchandiser, "given a difficult environment."
Heinbockel said he was surprised that Gannon had not been given the post that instead went to his underling, MacNaughton, who he said will most likely be responsible for driving procurement economies and developing a cohesive private-label program as executive vice president, merchandising and marketing.
Another surprise was the naming of Tripp as executive vice president, Supervalu, and president of Retail Midwest, which includes Cub Foods, Hornbacher's, Jewel and Shop 'n Save. He also will oversee pharmacy operations companywide. Heinbockel said he had expected that Tripp might oversee pharmacy, but he had not expected him to take over the supermarket chains.
Knous will gain retail responsibility with the addition of Albertsons' Bristol Farms division.
"We see this as a clear developmental step for her," said Gary Preston, managing partner with executive search firm Preston & Reffett, Philadelphia. "It appears that, like a lot of non-supermarket retailers, they are giving her the opportunity to broaden her perspective by supervising an operating company."
He also noted that Knous had worked for Safeway's Von's division in Southern California, where Bristol Farms is located, before she joined Supervalu.
Mark Husson, New York-based analyst with HSBC, London, applauded Knous' appointment, saying it would add strategic thinking to that banner without sapping its current strengths.
"Because she's a financial person, they're not putting a merchant in control of that business," he said. "If you did put a merchant in control, you'd end up taking the breadth out of the current management team, because the current management team at Bristol Farms, above all else, are smart merchants."
Hooley also is gaining more responsibility with the addition of the Shaw's and Acme divisions. He previously oversaw Supervalu's regional banners, and he retains responsibility for bigg's, Farm Fresh, Scott's and Shoppers.
"John Hooley did a superb job rebuilding Cub Foods' business and making corporate retail outside of Save-A-Lot become real power alley of strength for Supervalu," said Burt P. Flickinger III, managing director, Strategic Resource Group, New York. "They're giving John the area of greatest competition but also the area with the greatest upside."
Other top executives to remain with the combined companies and working on the transition include Roe Cefalo, currently Albertsons executive vice president, real estate development and new store formats, and Kathy Herbert, Albertsons' executive vice president, human resources. In addition, Bob Borlik, who had recently retired as chief information officer at Supervalu, will provide interim technology consulting.
Preston said the combination of Albertsons and Supervalu executives should help smooth the transition.
"By retaining a number of senior executives from the acquired company, they are clearly easing the comfort level of former Albertsons associates into the acquiring organization," he said.