Canadian Tire Centralizes Business Units
By Tom Ryan
Canadian Tire has laid off some of its top management in a move
to shift from its longtime structure of five “separate but interrelated
a “one company” approach. The retail conglomerate said the former “silo
perspective” caused unnecessary duplication and bloated costs while also
hampering efforts to push sales across the organization.
have put experienced and talented individuals in key roles across the organization,
we have reorganized to much more effectively live up to our commitment to allow
every customer to feel they are dealing with one company rather than a series
of loosely integrated business units,” chief
executive officer Stephen Wetmore said on a conference call. “Looking
forward, we need a structure focused on motivating customers to spend more
across our unified business, to do so more often and to build a support infrastructure
that delivers a superior customer experience.”
The company, with about
1,300 stores and gas stations across Canada, operates five units: Canadian
Tire retail, Mark’s Work Wearhouse, financial services, petroleum and PartSource
specialty automotive stores. But it sees its six principal business categories
as: living, fixing, playing, automotive, apparel, and financial services.
Arnett, president of Canadian Tire, will be put in charge of the first three
groups. Automotive will be led by Glenn Butt, who was named executive vice
president customer experience and automotive. Paul Wilson remains president
of Mark’s and Dean McCann remains president of financial services. Three other
top execs will leave the company.
Separate information technology, finance and
other organization structures were also in place for each division under the
“While this structure led to a focus on individual business performance,
it significantly increased our operating costs and led to an unfocused approach
on our customer,” said Mr. Wetmore.
A pretax charge of about $15 million Canadian will be taken in the third quarter to cut less than one percent
of Canadian Tire’s workforce of more than 58,000.
Discussion Questions: What are the pros and cons of retailers going to a more
centralized organization? Does it make sense for Canadian Tire?
- Canadian Tire Retools for Growth – Canadian Tire
- Canadian Tire Steers Toward ‘One Company’ Structure – The Wall Street
- Canadian Tire shuffles management – The Globe and Mail