Incoming CEO specializes in turnarounds

From a humble upbringing as the son of a sharecropper to a penchant for bringing stability to troubled companies, Supervalu's incoming CEO, Sam Duncan, understands turmoil.

Duncan, named to the top job Thursday in one of several dramatic moves, is a veteran of the retail and grocery industry who pulled off turnarounds at Shopko and OfficeMax, where he retired in 2011. He is expected to officially become Supervalu's chief in February, replacing Wayne Sales, who took over in July with the company in a tailspin.

With shrinking market share and increased competition from low-priced competitors such as Wal-Mart and Target, the challenges are significant as Duncan takes over the Eden Prairie-based company.

"The [supermarket] industry dynamics are tough for any CEO," said Michael Keara, an analyst at Morningstar who noted that he was heartened to see a management team with "extensive turnaround experience."

Returning to the grocer's aisle brings Duncan full circle.

He started his working life in 1969 as a 15-year-old "courtesy clerk" at an Albertsons in Southern California, and he spent the next two decades rising through the ranks.

In 1992 he took a job with grocery chain Fred Meyer as vice president of the grocery department, during the company's push into California. Later, he became president of Ralph's Supermarkets, which Fred Meyer had purchased, and was named president of Fred Meyer in 2001, which by then was a division of Kroger Co.

In the past decade Duncan gravitated toward companies in trouble -- righting Shopko's balance sheet and pulling OfficeMax from the brink of bankruptcy.

At Green Bay, Wis.-based Shopko, where he arrived as chief in October 2002, the general merchandise retailer was weighed down by debt. Duncan cut costs, remodeled stores and added more private label brands, food, electronics and maternity clothes.

He left Shopko in April 2005 after engineering a $1 billion sale to Minneapolis private equity firm Goldner Hawn Johnson & Morrison. Though sales and market share didn't markedly improve, analysts said he stopped the bleeding. During his tenure, shares rose from $13 to about $23.

Duncan moved directly to OfficeMax at a time when dissident shareholders were demanding the office supply retailer be broken up or sold, and the company was embroiled in a billing and accounting scandal.

Duncan closed unprofitable stores, trimmed jobs and consolidated warehouse and distribution operations, earning praise from analysts. Though the Great Recession stymied his turnaround efforts. Duncan brought financial stability to the $7 billion company, cleaning up the balance sheet and keeping revenue stable as the office supply market was hit by business slowdowns and competition from Amazon and other online retailers.

Life story has twists, turns

Duncan's father had been a sharecropper in Arkansas, and Duncan said the "ugly" racism he saw in the Deep South shaped him. "Everybody in this world deserves a chance," he told Success magazine in 2010.

His parents split when he was young, according to the magazine, and his mother brought him to California with $400 to her name.

Duncan spent a couple of years at community college, and it's unclear whether he earned a college degree, as he had planned to earn an undergraduate degree and pursue a master's degree when he retired from OfficeMax.

Retirement threw Duncan a curveball, however. Even though he announced his retirement a year before stepping out the door, he holed up in the TV room of his Portland, Ore., home and struggled to get out of bed.

Another old hand on hand

Returning to the C-suite almost exactly two years after leaving OfficeMax, Duncan will be reunited with Robert G. Miller, Supervalu's incoming chairman of the board. Miller is another longtime retail executive who is considered a turnaround specialist.

Like Duncan, Miller began his career at Albertsons and worked his way to management. He served as CEO of Fred Meyer from 1991 to 1999 and was chief operating officer at Kroger.

Analysts suspect that Cerberus Capital Management, which is taking up to a 30 percent stake in Supervalu, had a hand in their selection. "It's typical when private equity takes a stake in a company they bring in their own management team," said Morningstar's Keara.