MONTREAL – Rona is hiring a veteran of Canada’s grocery industry as chief executive to implement its recently announced strategic plan designed to rebuild the embattled home improvement retailer to profitable growth.
Robert Sawyer, 59, will become Rona’s president and CEO next month after more than 30 years in grocery retailing, including nearly four years in the No. 2 management position at Metro Inc. (TSX:MRU) – another large Quebec-based national retailer.
“It became increasingly clear to us that to ensure a successful transformation, we needed to hire a specialist in retail and distribution operations,” said Robert Chevrier, executive chairman of Rona’s board of directors.
“Robert has the operational and turnaround expertise needed to put Rona back on the path to profitable growth and increase value for all of our stakeholders.”
Rona, which has its headquarters in the Montreal-area community of Boucherville, Que., has grown to nearly 30,000 employees across the country through a combination of acquisitions, partnerships and internal growth.
Chevrier said Sawyer will “play a key role in simplifying and optimizing the Rona business model, particularly with respect to merchandising, pricing strategy, supply chain, service to consumers and service to Rona dealers.”
He said Rona’s acting CEO, Dominique Boies, will assist Sawyer and be on the corporation’s management committee.
Boies had been Rona’s chief financial officer when he was named interim CEO after the company’s long-time chief executive, Robert Dutton, stepped aside in November.
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Many of Rona’s investors have expressed frustration with the company’s returns in recent years, especially since it rejected a takeover attempt by Lowe’s last year. The U.S. home improvement company has a relatively small presence in Canada and an acquisition of Rona would have greatly increased its market share.
Sawyer’s appointment came after Rona (TSX:RON) hired outside experts to help its search and several candidates reportedly turned down the job.
Derek Dley of Canaccord Genuity called Sawyer a strong appointment but said it’s going to take more than a new CEO to “right the ship” at Rona.
“They’re facing a number of macroeconmic headwinds I don’t think one individual can change at this point,” he said in an interview.
In addition to a weak home renovation market in Canada, Rona is losing market share to the big players from the U.S. – Home Depot and Lowe’s, Dley added.
Although Sawyer comes from a different industry, Dley said he has lots of retail experience and worked in distribution under different banners.
Metro, which has 65,000 employees, 600 food stores and 250 drug stores under several banners, said the position of chief operating officer – often seen as a potential successor to a CEO – won’t be filled after Sawyer’s departure.
The heads of the grocery company’s Quebec and Ontario divisions will now report to Metro CEO Eric La Fleche, the company said in announcing Sawyer’s departure.
“Mr. Sawyer has played an important role in the success of Metro over the past 33 years and it’s with regret that we learned of his decision to accept a new challenge with another company. We thank him for his contribution and wish him well in his new position,” said La Fleche said in a statement.
Irene Nattel of RBC Capital Markets said Sawyer’s departure from Metro is “not the best news” but the grocer is in very good shape with deep executive bench strength.
“For Rona, this is an excellent choice as Mr. Sawyer is an experienced retail veteran, albeit with no experience in discretionary retail,” she wrote in a report, adding that the move was a great late-career challenge for Sawyer.
Despite Sawyer’s talents, she too said he cannot change the macro headwinds facing Rona, such as slowing consumer spending and a forecasted decline in residential investment spending in 2013 and 2014.
On the Toronto Stock Exchange, Rona’s shares were up 49 cents, or 4.64 per cent, at $11.05 in Tuesday morning trading. Metro’s share were ahead 59 cents at $64.03.
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