Robinson’s Gets a New Chairman : Denver Executive Tom Roach Replaces Michael Gould
Associated Dry Goods, parent of the 23 J. W. Robinson department stores in Southern California, on Monday named Tom L. Roach as Robinson’s chairman and chief executive to replace Michael Gould, who resigned.
Roach, 42, has been chairman and chief executive of Associated’s Denver Dry Goods division, known as the Denver--a chain of upscale stores similar to Robinson’s--since 1979. Previously, he was vice chairman of the company’s Lord & Taylor division, senior executive vice president of the Southern California Robinson’s (from 1977 to 1978) and president and chief executive of Robinson’s of Florida.
Gould, 43, who had served as chairman of Robinson’s since December, 1980, resigned “to pursue other interests,” Associated Dry Goods said in a statement. Gould could not be reached for comment.
Robinson’s has enjoyed good growth and sales but “had a disappointing year as far as profitability,” said Philip Bradtmiller, an Associated spokesman. The division needs to concentrate on “managing the expense side of the business,” Bradtmiller said, “and there Tom (Roach) has proven himself as being very capable.”
Annual sales at Robinson’s, considered Associated’s premier division, are reportedly more than $560 million.
“They’ve been signaling for some time that merchandising was very good but that costs were not under control,” said analyst William N. Smith of Smith Barney, Harris Upham in New York. “No one would deny that Gould was a brilliant merchandiser and has made them into beautiful stores.”
In a March 7 report, the Value Line investment service noted that “rapid cost advances have forced the company to embrace stringent controls” and that the division probably suffered a decline in earnings for fiscal 1985.
Analysts cited in particular expenses related to advertising and store remodelings and openings. Robinson’s, which added four stores under Gould’s leadership, plans an important opening at South Coast Plaza in September. Other stores are planned for Palm Desert, Northridge and Santa Ana.
The management shift surprised analyst Sarah A. Stack of the Los Angeles-based brokerage of Bateman Eichler, Hill Richards. “Gould keeps Robinson’s ever-present in the consumer’s mind, with consistent advertising and quality of merchandise . . . and has stayed out of the vicious cycle of constant promotions,” she said.
“He may have been making investments for the long term that are difficult to assess on a quarterly basis,” she added.
Keen Competition
Roach enters what is widely regarded as the nation’s most competitive environment, one that proved sorely disappointing for merchants in last year’s fourth quarter. Department store chains that emphasize fashion apparel, especially Bullock’s and Robinson’s, have also discovered a staunch rival in Nordstrom.
Over the last two years, the four major department store chains in Southern California have announced changes at the top. In August, 1984, Federated Department Stores named Allen I. Questrom as chairman of its Bullock’s division, succeeding Franklin Simon, who retired at 57.
Last month, Kenneth F. Sokol replaced Judith K. Hofer as president and chief executive of May Co. California, and H. Michael Hecht became chairman and chief executive of Carter Hawley Hale Stores’ Broadway division, succeeding M. W. Proudfoot, who retired at 65.
Although Robinson’s has gained market share in recent years, it “did not do as well in the fourth quarter as had been expected (and) contributed to holding back Dry Goods’ earnings,” said Bernard Sosnick, an analyst with L. F. Rothschild, Unterberg, Towbin in New York.
Last week, Associated Dry Goods reported small declines in net earnings for both the fourth quarter and the year. Sales rose 2.8% in the quarter and 7.7% for the year, to $4.36 billion.
During Roach’s tenure at the Denver, the chain had five straight years of record sales and profit growth.
