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Toys 'R' Us hires former Domino's chief as next CEO
[NEW YORK] Toys "R" Us named David Brandon as its next chief executive officer, turning to the former leader of Domino's Pizza to continue a turnaround attempt at the closely held toy retailer.
Mr Brandon will take over on July 1, when current CEO and Chairman Antonio Urcelay retires from the company, according to a statement on Tuesday. Mr Brandon ran Domino's for 11 years and helped shepherd the pizza chain, then owned by Bain Capital Partners, through the largest initial public offering in restaurant history in 2004.
Mr Brandon, 63, will again be looking to revive another Bain- backed company at Toys "R" Us. The toy-store chain was taken private by Bain, KKR & Co and Vornado Realty Trust in a US$6.6 billion deal in 2005. At the time, Toys "R" Us was struggling to compete with discounters like Wal-Mart Stores. In the ensuing decade, the rise of Amazon.com Inc has only added to its woes by bringing more low prices to the market.
The chain abandoned an IPO in 2013 and has posted revenue declines during the past three holiday seasons, its biggest sales period.
Under the new CEO, the company "must continue to execute its strategic plan and grow earnings, while energizing its authority position in the market through innovation," the Toys "R" Us board said in the statement.
So far, the company's comeback plan has centered on cutting costs, investing in its online business, and improving stores with better lighting, more signs and cleaner aisles.
While the company has continued to post net losses, its adjusted earnings before interest, taxes, depreciation and amortization - a measure of operating performance - have improved. Profit by that measure rose 10 per cent to $642 million last year. The Wayne, New Jersey-based company has a heavy debt load, including US$451 million in interest costs last year, which weighs on its net losses.
Mr Brandon left Domino's in 2010 and became athletic director for the University of Michigan. He resigned from that post in October amid growing disapproval from the board and student anger over his profit-driven approach to the job.
At Domino's, Mr Brandon pushed the pizza chain into the digital age by deploying an online ordering system. His tenure wasn't marked by a big sales increase, though. Revenue gained about 21 per cent from US$1.16 billion in 1999 to US$1.4 billion in 2009.