Jim Donald’s Career Comes Full Circle As He Returns To Albertsons As President, COO
I’ve communicated with Jim Donald quite a bit over the past six months. Beyond our normal conversational tone of mutual needling and self-deprecation, I was convinced that one of the industry’s greatest motivators had finally hung up his apron and was content to sit on a few boards and continue to deliver speeches in upbeat and storytelling manner (after all, not every non-grocery industry group has heard Donald’s “salmon” yarn).
While his exuberance was still very apparent, he also told me several times he was a bit weary from the more than 40 years of high-level game action and was enjoying his lifestyle of travel and control of his own destiny.
Then Albertsons CEO Bob Miller called. If Jim Donald is the retail food industry’s version of the Energizer Bunny, then Miller is the best salesman and recruiter in the business.
Miller just helped engineer the biggest industry deal of the new year in fusing his $60 billion supermarket organization with Rite Aid Corp., the nation’s third largest drug chain who was discreetly seeking a partner after selling about 45 percent of its stores to Walgreens late last year.
The fit between the two companies was already a strong one with Miller having previously served as Rite Aid’s CEO and board member. Miller was also close to Rite Aid chief executive John Standley (who will become CEO of the newly combined company when the deal is completed later this year), having worked with him at Fred Meyer, Pathmark and at the Camp Hill, PA drug chain.
With much of the focus on the acquisition, there would have to be some shoring up at Albertsons, too. The company’s most recent president and COO Wayne Denningham retired at the end of last year and Miller, who will become chairman of the new enterprise, clearly needed a dependable and proven executive to guide the company’s 2,300 supermarkets.
Miller and Donald’s relationship dates back more than 40 years. After a few years working for Publix in his native Tampa, FL, Donald joined Albertsons where he stayed for 16 years advancing his career primarily in Florida and Texas. In 1991, Sam Walton reached out Donald and asked if he’d be interested in heading a new concept at the Bentonville, AR company- the company’s fledgling SuperCenter division. Donald remembers those days as extremely exciting and very exhausting.
In 1994, he was recruited by another Hall of Famer – Steve Burd – to run Safeway’s Eastern division, a unit that for decades had served as a stopover for more than 10 Safeway executives as they ultimately advanced their careers in other markets for the big chain. Donald’s career at Safeway was much different than almost all of the others (the exception being the great Don Smith who helmed the Eastern division in the early 1980s). Donald’s tireless work ethic was quickly apparent; he made it a priority to engage with the associates, from store level to the third shift in the warehouse. He was a difference maker.
A few years later, Jim Donald was presented with an opportunity to finally run his own show, although the showroom was hardly in great shape. I can vividly remember dining with Jim 22 years ago at a great Italian restaurant in Baltimore when he shared with me the opportunity to become CEO of Pathmark. Even though I knew he wanted the challenge of heading his own company, he asked me what I thought about the opportunity to run a once great regional supermarket chain that had been financially decimated by the greenmail actions of the Haft family several years earlier. As part of my reporting duties, I knew Pathmark well and encouraged Jim to take the job even if it came with some risk. Donald was the right age, had the proper training and necessary experience – his time to lead was at hand.
He did a fine job at the Carteret, NJ-based chain for six years, instilling his unique personal brand of leadership which changed the culture and financially stabilized an organization that had endured 44 consecutive quarters of negative comps prior to Donald’s arrival (Pathmark was sold to A&P in 2007; today neither chain exists).
In 2002, Donald got a call from Howard Schultz, founder, chairman and CEO of Starbucks. He successfully pitched Jim on joining the iconic coffee merchant as president of the company’s North American division. Three years later he was named chief executive with Schultz remaining as chairman.
He stayed as CEO for three years, before being summarily ousted by Schultz as Starbucks was victimized by a declining economy which led to significant decrease in the company’s stock price and overall value.
I talked to Donald shortly after his dismissal. I was expecting to hear some bitterness in his voice, but he would have none of that. Instead he noted that Howard Schultz founded the company and remained his boss, so he could do what he wanted. In fact, he praised Schultz for giving him the opportunity to head such a dynamic and innovative company such as Starbucks.
In truth, Jim Donald’s firing was the best thing that could have happened to his career. His six- year stint in Seattle put his name on the road map of corporate America; he was now a known entity especially on Wall Street.
His ability to take the high road even in challenging times and also learn from his all-star mentors – Miller, Walton, Burd and Schultz – would create future opportunities that even Donald couldn’t have predicted.
For the next year, Jim devoted a lot of energy to developing a career as a speaker while also serving on several corporate boards. He also got involved with the Haggen family, which owned 33 stores in Washington and Oregon. Like many independent operators and small regional chains, Haggen was a company struggling with industry change and family-related challenges. Donald was brought in to change the culture and also to find a potential exit strategy for the high-end merchant. It took a couple of years, but Donald used his Wall Street connections to engineer the sale of Haggen to private equity firm Comvest.
A year later, his Wall Street contacts provided him with a unique opportunity. Private equity firms Blackstone Group, Centerbridge Partners and Paulson & Co. acquired residential hotel chain Extended Stay while it was in bankruptcy in 2010. After 18 months of less than desired results, the three PE firms hired Donald as chief executive, even though he had little knowledge of the hotel business. It really didn’t matter, because once Jim learned the mechanics of the business, the one staple of any labor intensive retail business is the culture of the company and the associates who create that culture. It’s a people business – and Jim Donald by now was arguably the greatest practitioner of creating a workplace that was fun and interesting and one where management really did care about the associates. His door was always open.
By 2015, Extended Stay Hotels turnaround was obvious and it successful launched an IPO, which achieved the primary goal of its investors and allowed Jim to step down and seek his next opportunity.
Except this time, after more than two years as a free agent and several conversations about his future, I though he was really done with corporate life.
And then Bob Miller called.