Dive Brief:
- Rick Dreiling stepped down as CEO of Dollar Tree on Sunday, the company said in an announcement late Monday. Dreiling also resigned from the company’s board. He is leaving due to personal health issues after leading the company for nearly two years.
- Dollar Tree named Chief Operating Officer Michael Creedon interim CEO. The retailer said its board has initiated a search for a permanent CEO, which will include internal and external candidates.
- Additionally, Ned Kelly was elected board chairman following Dreiling’s departure. Kelly joined the board in 2022 and was re-elected to the position for the past two years.
Dive Insight:
Dreiling’s departure comes as Dollar Tree is navigating several business challenges. They include a strategic review of its Family Dollar banner, plans to close about 1,000 stores — most of them Family Dollar locations — and financial performance that has fallen short of expectations.
“With my health presenting some new challenges over the past two months, the time is right for me to step away and focus on myself and my family,” Dreiling said in an announcement. “I have been honored to serve the customers and associates of Dollar Tree and Family Dollar since 2022. Having worked side-by-side with Mike, I am confident in his strong leadership, deep passion for our business and ability to create value.”
Dreiling’s unexpected exit limits visibility on the company’s forward-looking strategy and execution and could affect key business decisions during the holidays and into 2025, analysts with Telsey Advisory Group, led by Joe Feldman, said in a Tuesday morning note.
“We believe Mr. Dreiling’s experience in the dollar store industry played a key role in understanding the business, designing the strategy for both banners, and taking bold actions to revive the business,” Feldman said. Dreiling was formerly the CEO of Dollar General.
Creedon joined the company in 2022 as COO. He took on oversight of merchandising and supply chain for Dollar Tree and Family Dollar in February. He joined the company from Advance Auto Parts, where his last position was executive vice president and president of U.S. stores.
Creedon’s annual base salary will rise to $1.1 million as interim CEO, according to a regulatory filing with the U.S. Securities and Exchange Commission. He will also receive long-term incentive awards with an aggregate value of $2.25 million and a cash bonus of $500,000 at the end of the 2024 fiscal year for assuming leadership during the Family Dollar strategic alternatives review process. The bonus is contingent on meeting certain performance objectives related to the Family Dollar review. If Creedon’s employment is terminated for cause or he resigns within three years, the bonus must be fully repaid.
Health issues caused Dreiling to miss the company’s Q2 earnings call in September, which Creedon led in his absence. As he steps into the interim CEO role, “Mr. Creedon is well-suited to lead the company, given his familiarity with the operations over the past two years and his active participation in designing the strategy and managing day-to-day operations,” Telsey’s analysts said.
Dollar Tree on Monday also reiterated its commitment to complete a review of strategic alternatives for its Family Dollar segment. Telsey’s analysts said “the review is needed, given the company has tried reviving the segment multiple times and has failed to show much progress.”
Based on its 2026 projections, Telsey estimated Family Dollar could obtain a valuation of $2.5 billion to $5.5 billion. “We believe a spinoff could be easier to execute, but a sale would be better to generate cash to invest and repurchase shares.” The company operated about 16,300 stores in 48 states and five Canadian provinces as of Aug. 3.
