Target loses sourcing executive to Family Dollar

Posted Apr 5th 2007 3:05PM by Brian White
Filed under: Management, Target Corp. (TGT)

It looks like discount retailer Target Corporation (NYSE:TGT) will be losing one of its own to Family Dollar Stores Inc. (NYSE: FDO). The dollar-store retailer has announced that Wook Lee will be filling the newly created position of senior vice president of global sourcing for Family Dollar. Lee was formerly global vice president of production service at Target Corp. and will take over the reigns at Family Dollar in the areas of developing the company's sourcing strategy.

It's kind of hard to think that a senior sourcing expert inside one of the recent success stories in discount retailing (Target) would leave to join Family Dollar, but it's plausible -- and I'm sure Family Dollar paid handsomely to get Lee on board. Are the sales of dollar-type stores going to be on the rise soon? Most likely, yes. When researching retail pricing at Dollar General, Dollar Tree and Family Dollar, I'm amazed that the pricing is so low compared to even Wal-Mart's pricing structure.

In other words, I can't imagine sales not increasing over time at these types of retail stores. With Family Dollar's CEO stating that "Today, approximately 40% of our merchandise is manufactured globally ... enhancing our global-sourcing capabilities will enable us to improve merchandise quality and lower our production and supply-chain costs," it's easy to see why it needs a global sourcing executive with the kind of experience that Target provided.

Family Dollar's 6,300 discount stores in 44 states makes it a pretty large player in this arena along with Dollar General, which was just bought recently by famed equity house KKR for $6.9 billion (probably due to being undervalued). Are things really churning in the dollar retail business? You could say that based on all these recent moves.

Tags: Dollar General, DollarGeneral, Family Dollar, FamilyDollar, Target, Target Corp., TargetCorp., TGT