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The overlooked story of the moment in the mass retailing community concerns the status of Fred’s, the general merchandise retailer that recently hired Mike Bloom as its president and chief operating officer.
The overlooked story of the moment in the mass retailing community concerns the status of Fred’s, the general merchandise retailer that recently hired Mike Bloom as its president and chief operating officer.
At this point, more is known about Bloom than about Fred’s. After a long and successful career at CVS, Bloom resigned unexpectedly in 2011. He quickly joined Family Dollar, the No. 2 dollar store chain, and appeared to be doing well in Carolina when he and CEO Howard Levine had a falling out, and Bloom left.
Earlier this year he signed on to manage Fred’s, a retailer that defies description in a retailing world dominated by discount retailers Walmart and Target; chain drug powerhouses Walgreens, CVS and Rite Aid; and a variety of strong grocery retailers that include players at both the national and regional levels.
After joining Fred’s, Bloom quickly brought on board Bryan Pugh, formerly of Walgreens, where he alternated between merchandising and operational assignments before departing last year. Like Bloom during his time at CVS, Pugh reportedly acquitted himself well at Walgreens, surviving during a transitional period after the company’s merger with Alliance Boots.
For a time he ran Walgreens’ merchandising department; for a period he functioned as liaison between merchandising and operations; for a time he was the merchandising face of the retailer. His performance throughout drew more positives than negatives. Clearly, Bloom expects a similar performance from Pugh at Fred’s.
About Fred’s, little is certain. It is a Southern retailer operating 663 stores, based in Tennessee. Its stores could qualify more easily as promotional drug stores than as discount stores. Indeed, pharmacy accounts for 40% of its sales, a percentage that pleases Bloom, who became comfortable at CVS, a drug chain with a pharmacy contribution of around 70% of sales.
In fact, during Bloom’s tenure at Family Dollar, that retailer’s interest in opening pharmacy counters repeatedly cropped up.
The other critical factor about Fred’s is its performance to date, which has been less than spectacular, often far less. As one of the retailers reporting monthly sales, its figures, month by month, have consistently paled before those of Walmart, Target, Walgreens and CVS. Which raises the inevitable question: What will Bloom do to revive them?
For now, Fred’s new COO isn’t saying, claiming he’s still assembling the people and the programs that the retailer obviously needs if it is to compete effectively in the retail marketplace going forward.
Given Bloom’s drug store roots, and the success he enjoyed at CVS, it is logical to assume that Fred’s will come to more closely resemble CVS and Walgreens than Walmart and Target. Saying so is easy; doing so is more difficult.
There’s certainly opportunity to be seized in exploring the world of pharmacy. Building or consolidating the mix around pharmacy will drive more customers to Fred’s, not only to fill prescriptions but to purchase those health care products that often complement a prescription drug regimen.
If health care is an option, so too is healthy living. And, increasingly, that means a grocery assortment. Throughout the nation, mass retailers are wrestling with the healthy living equation. Thus far, few have gotten it right. Thus, Fred’s possibilities in this area are realistic, if not easily realized.
Other possibilities exist, but they are not as obvious — or as closely attuned to Mike Bloom’s strengths and experience.
This much is obvious, however: Work needs to be done at Fred’s, and it needs to be done quickly. For Fred’s problems run much more deeply than a momentary sales slump.
Finally, a word about Mike Bloom. Those who know him best know him to be a tenacious worker, a retailer who invariably understands the possibilities and dismisses the barriers to achieving those possibilities. At CVS, his career path was consistently upward. At Family Dollar, despite the unhappy ending, he was making progress toward modernizing that retailer and extending its relevancy in a time of changing consumer attitudes and shopping patterns. By most accounts, Family Dollar was a more exciting, more efficient retailer when Bloom left than it was when he arrived. There is no reason to doubt, therefore, that he will make a difference at Fred’s.
The question, then, is not whether, but when. The time for change at Fred’s is now. The burden, then, is on Bloom to produce it.