May 7 (Bloomberg) -- Ross Stores Inc. Chief Merchandising Officer Barbara Rentler will take the top job at the discount retailer next month, becoming the 25th female chief executive officer to currently serve at a Fortune 500 company.
Rentler is succeeding Michael Balmuth, who was already slated to step down on June 1, Dublin, California-based Ross said today in a statement. Rentler and Chief Operating Officer Michael O’Sullivan also will join the company’s board. Balmuth, 63, announced plans in August 2012 to hand over the CEO job and become executive chairman.
“These people are very highly qualified -- it shows a logical succession,” said Mark Montagna, an analyst at Avondale Partners LLC in Nashville, Tennessee, who has the equivalent of a buy rating on the shares. “It shows they’ve been grooming them for Michael Balmuth’s eventual succession, so it should be seamless.”
Rentler’s promotion means that 5 percent of Fortune 500 CEOs will be women, assuming there are no other changes before she starts on June 1, according to Catalyst Inc., a New York-based women’s research and advocacy group. That represents a record level of representation for companies on the list.
“It’s a milestone, but the day we’ll really celebrate is when we see the day that it’s not remarkable that she’s taking on this role because of her gender,” Deborah Gillis, CEO at Catalyst, said in a phone interview. “She was in a really critical role for her organization, she contributed to the success of her company, so she was in line for succession -- that wasn’t an accident.”
The new CEO faces the challenge of reviving growth at Ross, which operates about 1,300 bargain-priced clothing and home-goods stores. In the quarter that ended Feb. 1, the chain posted its first quarterly sales decline in at least a decade. Over the holiday season, apparel retailers piled on deep discounts to attract wary shoppers.
Ross shares rose 0.2 percent to $67.78 at the close of trading in New York. The stock has fallen 9.5 percent so far this year, compared with a 1.6 percent gain for the Standard & Poor’s 500 Index.
Rentler, 56, joined Ross in 1986 and held various merchandising positions as she rose the ranks. Like Balmuth, Rentler has a firm understanding of the merchandising process that’s key to the success of Ross’s off-price business model, said Pamela Quintiliano, a New York-based analyst at SunTrust Banks Inc. Ross, because of its location in California and domestic growth possibilities, could easily have found a new CEO from outside the organization if it had wanted, she said.
“They didn’t need to go with an internal candidate,” said Quintiliano, who recommends buying the shares. “It’s based on her success.”
Rentler’s promotion highlights that more progress needs to be made in getting women to the role of CEO, Ashleigh Rosette, an associate professor at Duke University’s Fuqua School of Business, wrote in an e-mail.
“Women are not remotely represented in the top leader ranks to the extent that their labor-force participation rates suggest they should be,” she said.
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