Thrifty Payless Executive Replaced 7 Months After Firm Leaves L.A. : Merger: Chairman of Bi-Mart stores unit will lead company. Sources said former CEO did not consult sufficiently with board.
Tim McAlear, the executive selected to lead the recently merged Thrifty and PayLess drug store chains, has been replaced just seven months after he persuaded Thrifty to move its headquarters from Los Angeles to Wilsonville, Ore., as part of the consolidation.
Thrifty PayLess, Inc., would not comment on the reasons for McAlear’s departure but said he has been replaced by Marty Smith, chairman of the merged company’s Bi-Mart stores division. Smith has also become chairman of the company.
The changes, which were made Friday, raise questions about past efforts to meld the two companies. On Tuesday, sources familiar with company developments said McAlear did not consult sufficiently with his board of directors on major decisions.
“The board of directors believed that a change of leadership was appropriate,” company spokeswoman Mary Ann Dunnell said, refusing further comment on the circumstances.
McAlear was expected to lead the drug store giant before Thrifty and PayLess formally merged on April 20. The merger occurred after Kmart Corp., parent company of PayLess, agreed last December to sell the chain to Thrifty for $1.2 billion. The deal was engineered by Leonard Green & Partners, a Los Angeles-based investment firm that controlled Thrifty.
Leonard Green was chairman of the merged firm’s board of directors during McAlear’s tenure. Green has relinquished that title to Smith, but remains on the board of the company, which has about 1,100 stores in 11 Western states.
McAlear and Green were not immediately available for comment. However, Jonathan Sokoloff, a principle at Leonard Green & Partners, said the changes were unrelated to the financial performance of Thrifty PayLess.
“The company has done well and will continue to do well,” he said “Business is continuing . . . with minimal disruptions.”
The company said it expects to generate annual sales of $4.7 billion. In the three-month period ended Oct. 2, the company’s most recent fiscal quarter, Thrifty PayLess had a 3.3% increase in same-store sales--revenue from stores open at least 12 months.
