Thrifty Payless Board Ousts Chairman

PORTLAND - Thrifty PayLess Inc. has ousted Chairman Tim McAlear, who was followed out the door by a second top executive in the recently merged Western retail chain.

McAlear was replaced by Marty Smith, the president and chief executive officer of Eugene-based Bi-Mart Corp., a subsidiary of Thrifty PayLess.

The Wilsonville-based company refused to comment about the change, and McAlear could not be reached.

Thrifty PayLess spokesman Gary Holmes said only that the "board of directors believes that a change of leadership is appropriate at this time."

Holmes, asked whether McAlear had been fired or had resigned, said, "I really can't say anything more."

McAlear, a veteran retailing executive, was chosen the first president and chief executive officer of Thrifty PayLess after it was formed April 20 by the merger of Thrifty Drugs and PayLess Drug Stores.

Thrifty had nearly 500 stores in California; PayLess had 541 stores in 11 states, including Washington. Together, the two chains employ 35,000 people and had nearly $4.7 billion in revenue last year.

Bi-Mart, a Thrifty subsidiary since 1988, remains a part of the new company. Bi-Mart has 42 drug and merchandise membership discount stores in Washington and Oregon.

The merger was the outgrowth of the sale of PayLess by its parent, Kmart Corp., for just under $1.2 billion. The purchaser in the leveraged buyout was Thrifty's parent, TCH Corp., which was renamed Thrifty PayLess Holdings Inc. after the merger.

McAlear, a former Kmart executive who joined PayLess in 1987, became president and chief executive officer in 1990.

Smith, an Indiana native, began his career with Bi-Mart in Eugene in 1964 as a hardware clerk. He was named president and chief executive officer in 1985.

He said that his appointment to the top spot at Thrifty PayLess "came as somewhat of a surprise" and that he did not expect any major changes in operations.

After McAlear's ouster, Lori Nelson, a senior vice president for marketing, also left the company. Holmes, the Thrifty PayLess spokesman, also refused to say whether Nelson was fired or resigned.

Nelson, who was hired in July 1993, had been one of about 15 top executives of the company formed with the merger.

Melissa Darcambal, a retail industry analyst with Duff & Phelps Investment Research Co. in Chicago, said she was puzzled by the departures. She said that even when a company is not performing well financially, "you give a guy at least a year. It can't be because of the way the company is performing. It's just not long enough."