From Gap to Dollar General, retail chiefs quit as challenges grow

Many US retailers are opting for new leadership or moving ahead with pandemic-delayed succession plans as the industry adapts to challenges beyond the Covid-19 health crisis.Many U.S. retailers are opting for new leadership or moving ahead with pandemic-delayed succession plans as the industry adapts to challenges beyond the Covid-19.

On Monday, Gap replaced Chief Executive Sonia Syngal after more than two years on the job. On Tuesday, Dollar General Corp. said its longtime CEO would step down. Those announcements follow recent exits of the CEOs at companies such as Bed Bath & Beyond, athletic-equipment merchant Under Armour and luxury-consignment seller The RealReal.

In the past, retail executives typically reached the top job through two paths: They were either great merchants, with a canny ability to anticipate popular styles and new trends, or skilled operators, with a mastery of the systems necessary to keep stores running smoothly. The shift to online shopping further complicated the job, requiring an understanding of technology and data. And other factors have come into play, including a push for making products in a sustainable way.
 

With the onset of the Covid-19 pandemic, retailers are dealing with fresh complications from supply-chain bottlenecks and historic levels of inflation to staffing issues and an increase in crime at retail stores.

“The landscape of retailing changed during the Covid era,” said Craig Johnson, the president of consulting firm Customer Growth Partners. “The skills necessary for a CEO to succeed today are much broader.”

Some data show that companies delayed their plans for CEO succession amid the turmoil of the pandemic. Overall CEO turnover fell in both 2020 and 2021 among S&P 500 companies and those in the broader Russell 3000 index, according to data from the Conference Board and data-analytics firm Esgauge.

CEO changes are now picking up. As of early July, the annualized succession rate for CEOs in the Russell 3000 index rose to 11.6% in 2022, up from 9.6% in 2021, according to the Conference Board and Esgauge data. Turnover is on pace this year to reach levels similar to those before the pandemic. The consumer discretionary sector, which includes retailers, has had a higher rate of CEO turnover in 2021 and 2022 than many other industries.