Juan Guerrero Paves a New Way Forward at Big Lots

Senior Vice President Juan Guerrero reveals his plan to build the supply chain of the future with Big Lots returning to its roots as a bargain retailer

Juan Guerrero, Senior VP, Big Lots; Photo by Stephanie Mast

BY ZACH BALIVA, HISPANIC EXECUTIVE

Did you find everything all right?” the cashier asked as Juan Guerrero stepped up to the checkout counter. Guerrero nodded. He was at the retailer to pick up a few necessities and look for a bargain or two. With the transaction complete, he grabbed his bags and headed for the car. But Guerrero wasn’t going home—he was on his way to buy the exact same products at the company’s second location on the other side of town.

Guerrero wasn’t starring in an episode of Undercover Boss. He was trying to evaluate his new potential employer.

The store was Big Lots, and Guerrero was being recruited to restructure its product supply chain as the chief supply chain officer. The Massachusetts Institute of Technology graduate developed a strong reputation after leading an ambitious Office Depot turnaround and driving strategy at iconic brands like Starbucks.

That made him a hot commodity for Big Lots after the publicly traded company’s stock price dropped by 90 percent in just three years. The Texan was a candidate to come in as the senior vice president (SVP) to help reinvent and reinvigorate the once thriving discount retailer.

“The reason I got excited about Big Lots was because I saw that it’s not a matter of doing too little too late. The company is healthy, and there is a huge opportunity to come back strong.”

Juan Guerrero

Before accepting the position, Guerrero needed to conduct a bit of field research. “I wanted to get the full customer experience and also discover what opportunities would come if I got the job,” he says.

What did his undercover mission reveal? Items were plentiful and everything he needed was in stock. His wife, however, noticed that some of the prices were too high. Lastly, store labor was stretched thin, and managers needed more employees on each shift. But Guerrero discovered something else: potential.

“The reason I got excited about Big Lots was because I saw that it’s not a matter of doing too little too late,” he says. “The company is healthy, and there is a huge opportunity to come back strong.”

Guerrero should know. Big Lots will be his third turnaround. Years after finding success at Office Depot, he saw another effort fail at Bed Bath & Beyond. Both experiences taught Guerrero lessons he’s now leveraging in his current role. “Everything is on the table in a turnaround. You have to be creative and solicit new perspectives and opinions from all stakeholders,” he says.

While Big Lots was once known as a treasure hunter’s paradise, the company spent the last decade trying to appeal to more mainstream shoppers. While the move led to short-term wins, it eventually diluted the Big Lots brand. The company found itself in direct competition with major players like Amazon and Walmart, which move a massive variety of product at scale.

Juan Guerrero; Photo by Stephanie Mast

Under Guerrero’s leadership as SVP, Big Lots now intends to get back to its discount roots. CEO Bruce Thorn tapped Guerrero to evaluate whether the Big Lots supply chain could accommodate that change in strategy.

“The simple answer was no,” Guerrero says. “The supply chain I inherited was only built to provide the steady replenishment of the same products.”

The company had the supply chain for the past. Guerrero is building the supply chain for the future.

The future of Big Lots lies in extreme bargains and treasure hunting, and that means Guerrero must replace the continuous flow supply chain model with an adaptable and flexible version. As such, he’s created a three-year plan designed to lower costs and reduce cycle time by 50 percent.

In February of this year, Big Lots acquired toy company Hearthstrong’s entire inventory in a deal valued at $22 million. The move will bring in five hundred new stock keeping units (SKUs), which Big Lots plans to sell at 50 percent to 70 percent off. After acquiring the massive inventory, Guerrero organized a no-frills pop-up distribution center to store products closer to urban centers and increase delivery speed.

By controlling these temporary spaces, Guerrero can plan inbound and outbound logistics, optimize transportation, and scale operations up or down to meet demand. Other components of the three-year plan include harnessing the power of emerging technology to automate manual tasks and the use of advanced industry practices like cross-docking and palletization.

As an immigrant from Mexico who was raised in Texas, Guerrero studied mechanical engineering, after which he joined a consulting company and worked on foreign markets including Russia, Argentina, and Brazil. He has also held positions at Yum! Brands, Bloomin’ Brands, and FleetPride. While Guerrero never used his MIT degree to design motors or systems, he does see some overlap in his current work.

“I like solving really complex problems, and turnarounds are very complex,” he says. “I’m still using my engineering skills, but instead of building cars or batteries, I’m building new companies.”

His efforts are helping Big Lots reclaim its bargain background. In March, Thorn, CEO of Big Lots, spoke on a quarterly earnings call and signaled plans to rely on big bargains for up to 75 percent of sales. “These extreme bargains create a more exciting treasure hunt experience, which will keep our customers coming back to our stores and help drive comparable sales growth,” Thorn says.

“I like solving really complex problems, and turnarounds are very complex. I’m still using my engineering skills, but instead of building cars or batteries, I’m building new companies.”

Juan Guerrero

As Juan Guerrero continues to reshape the supply chain at Big Lots, the company is poised to reclaim its position as a leading discount retailer. Guerrero’s three-year plan to lower costs, reduce cycle times, and introduce more extreme bargains is already bearing fruit. By harnessing emerging technologies, optimizing logistics, and creating a more flexible and adaptable supply chain, Guerrero is building the foundation for Big Lots’ future success, as the company doubles down on discounts and the “treasure hunt” experience that will keep customers coming back to its 1,300 locations nationwide.

Hispanicexecutive.com