HAYWARD, Calif. – Rick Leto has resigned from his position as Mervyns’ chief merchandising and chief executive officer. The company’s CFO, Chuck Kurth, will fill the spot while the board of directors looks for a replacement.
Board member Thomas Taylor is in charge of the nationwide search for a new CEO. He commented on Leto’s departure in a statement: “Over the past three years, Rick has led Mervyns’ transition as an independent company, positioning it for future growth. Mervyns has successfully brought marketing to competitive levels, implemented a new suite of operating systems, and opened the first new stores in several years.”
Leto started his career at Macy’s in 1973. For the nine years between 1996 and 2004, Leto was at Kohl’s Department Stores. He has been credited with helping Kohl’s expand to its current national size from a leaner, regional operation. Leto spent the summer of 2004 as CMO of Galyan’s Trading Co. until it was sold to Dick’s Sporting Goods.
Leto was hired by Mervyns in January 2005 as president and chief merchandising officer. “This is an exciting time at Mervyns and the beginning of a new chapter in its 55-year history,” Leto said in a statement upon taking the job. “With a continued focus on new and innovative products at great values, I look forward to ensuring Mervyns long and successful future.”
When Leto joined the retailer it had just been spun off from its parent company, Target, in the summer of 2004. It was sold to an investment group that included Cerberus Capital Management and Sun Capital Partners for $1.65 billion, and is now privately held.
In an interview with the San Francisco Bay Area newspaper the Contra Costa Times in late November, Leto emphasized the importance of Mervyns California home to its success:
“The reason we can maintain our business and grow is because we think that on the West Coast, the density of population that exists allows you to be [more] successful than if you were elsewhere. I truly think that if we execute our business plan staying close to the customer, understanding the ethnicity, which is of a very high level in California, much more than other parts of the country, there’s a reason for us to remain relevant to the consumer. We have to skew our business a little more to the ethnic culture here than at Kohl’s and Penney’s, otherwise we’d be just like them and I don’t think we’d be successful.”
Mervyns was founded by Mervin Morris in San Lorenzo, California in 1949 as a mid-tier department store. The retailer operates at least 177 stores in eight states, mostly in the Southwestern U.S. The company merged with Minneapolis-based Dayton Hudson in 1978. Dayton Hudson changed its name to Target Corp. in 2000 to reflect more accurately the power the company’s discount division had.