CEO Stefan Larsson to exit Ralph Lauren
Ralph Lauren CEO Stefan Larsson will step down in May, less than two years after taking the reins of the fashion brand, amid creative differences with the company’s namesake founder. Larsson joined the company after leading a turnaround at Old Navy, and before that he worked at H&M for 15 years.
A dispute over creative control led Ralph Lauren Corp. Chief Executive Stefan Larsson to leave the struggling luxury fashion brand after less than two years at the helm.
Larsson, a 42-year-old fast-fashion executive tapped to work alongside founder Ralph Lauren, said Thursday that the two men agreed the business needed to evolve but disagreed over the company’s creative and customer-facing strategies.
“The board, Ralph and I have over the last month worked very hard to find common ground,” Mr. Larsson said on a conference call with investors, calling his abrupt exit a mutual decision. “However, we have found that we have different views on how to evolve.”
Shares fell 12 % in New York February 3, 2017, and are now down more than 30 % over the past year. Ralph Lauren also reported another slide in quarterly sales.
Executives said turnaround efforts led by Mr. Larsson—which included closing stores, pulling back on discounts and jettisoning some of the company’s smaller labels—were on track, and promised smaller revenue declines next fiscal year.
Ralph Lauren, 77, who is the company’s biggest shareholder, executive chairman and chief creative officer, didn’t participate in the call. In a news release, the founder said he was committed to the strategy laid out by Mr. Larsson and would continue “to move our business and iconic brand forward as we have done for the last 50 years.”
Until a few weeks ago, all had been going well, according to a person familiar with the situation. Mr. Larsson had made strides streamlining the supply chain, with the help of new executives he had brought on board, and Mr. Lauren was supportive of the progress he was making.
Then, Larsson told Lauren that in order for him to be accountable for executing the business plan outlined in June, called “The Way Forward,” he would need control of the creative side of the business, which was Mr. Lauren’s domain, this person continued.
In particular, Mr. Larsson argued that he needed the ability to hire and fire creative talent, this person said. Mr. Lauren, who has overseen the creative side of the business since he founded his label in 1967, was unwilling to cede that control.
Tensions continued to bubble over the next few weeks, with the two men disagreeing over how the design, marketing and creative vision should evolve, another person said. The board met to discuss the impasse in recent days, and directors backed Mr. Lauren, this person continued.
Larsson will leave Ralph Lauren on May 1 and the company has started a CEO search. Its finance chief, Jane Nielsen, will lead the turnaround effort in the interim, the company said. “Ralph is not interested in running the business day-to-day,” Ms. Nielsen said.
Ralph Lauren is one of the few remaining designers of his generation to retain an active role in his company, which unlike rivals hasn’t sold out to a large corporation.
The designer retained the CEO title until passing it to Mr. Larsson in November 2015, two years after his longtime No. 2 executive, Roger Farah, stepped back from his daily role as president and chief operating officer. Mr. Farah later left the company and is now the CEO of Tory Burch LLC.
Although many designers, including Calvin Klein, Donna Karan and Yves Saint Laurent, found success by pairing their creative talents with a strong business leader, clashes between the two sides aren’t uncommon in the fashion industry. Diane Von Furstenberg’s CEO left her company late last year, after just 18 months on the job.
People who know Ralph Lauren said he is truly interested in seeing his company evolve. “There is not a more modern thinker or someone more open to change than he is,” said Robert Burke, who spent 11 years at the company before leaving to join Bergdorf Goodman in 1999. “But it’s a question of how much change a company and its consumers can handle.”
Citi analyst Kate McShane said finding a successor to Mr. Larsson “could be challenging as the new CEO’s vision still has to fit with that of Mr. Lauren’s.” In a note to clients, she said Mr. Larsson was considered “one of the best players in the industry” and worried that executives he recruited to the company would follow him out the door.
Ralph Lauren’s profits were sagging when Mr. Larsson took the helm in November 2015. His strategy has been to focus on fewer brands and speed the company’s supply chain. He has also started to slash costs, cutting more than 1000 jobs, or 8 % of the full-time staff, and is closing dozens of stores. In an interview in June, he also touched on product changes, saying he wanted the merchandise to focus on core items like blazers, military jackets and polo shirts, but with an updated look.
Larsson joined the company from Gap Inc.’s Old Navy, where he was credited with helping revive sales at the casual apparel brand. Previously, he spent 15 years at fast-fashion retailer H&M Hennes & Mauritz AB.
He stands to receive more than USD 26 million in exit pay, depending on the performance of the company and its shares over the next few years, according to his severance agreement. The company promised to pay him at least USD 10 million in cash, as well as a bonus for the fiscal year ending in March that has a target of USD 3.75 million, the filing shows.
For the fiscal third quarter, Ralph Lauren reported profit of USD 82 million, down from
131 million a year earlier. Revenue fell 12 % to USD 1.71 billion.
Executives said February 3, 2017 they expected sales to decline by a mid-teens percentage for the fiscal year and to shrink by a mid-single-digit percentage next fiscal year.
Abercrombie taps chief merchant for CEO post
Abercrombie & Fitch has promoted executive Fran Horowitz to CEO, filling a post that has been empty since Mike Jeffries departed more than two years ago.
Abercrombie & Fitch Co. announced on February 1, 2017, that Fran Horowitz, President and Chief Merchandising Officer, has been promoted to Chief Executive Officer of the Company. Joanne Crevoiserat, Executive Vice President and Chief Financial Officer, has been promoted to Chief Operating Officer while continuing in her current roles. Arthur Martinez will continue in the role of Executive Chairman. These appointments are effective immediately. Ms. Horowitz will also join the Company’s Board of Directors.
“Fran’s appointment to CEO reflects the leadership she has shown in the turnaround of Hollister, our efforts to provide a compelling, customer-focused shopping experience at both of our brands and, while we have more work to do, the repositioning of the Abercrombie & Fitch brand,” said Mr. Martinez. “She is a talented, creative and dedicated executive who has energized our team around important cultural values, a customer-centric mindset and a commitment to assuring our Company’s success. Fran’s efforts have earned her the respect of the Board and associates throughout our global operations. We are confident that as CEO, she is the right person to lead the company forward.”
“Joanne’s promotion to the role of COO reflects the scope of her responsibilities and the important role she plays in maintaining our operational discipline and financial strength in a challenging retail environment,” continued Mr. Martinez.
“It is an honour to lead Abercrombie & Fitch’s efforts to strengthen our performance and reignite our growth,” said Joanne Horowitz. “We have made solid progress in our efforts to listen to and provide our customers with shopping experiences that exceed their expectations. I am pleased to have Joanne, an extremely talented executive, as my partner in leading a best-in-class organization. I am excited to work with her and the rest of the extraordinary team we have built to position Abercrombie & Fitch for future success.”
With Horowitz’s appointment, the Office of the Chairman, which has been leading the Company since December 2014, has been dissolved.
Joanne Horowit (53), has served as President and Chief Merchandising Officer of Abercrombie & Fitch Co. since December 2015. She joined Abercrombie & Fitch as Hollister Brand President in October 2014 from Ann Taylor Loft, where she also held the role of Brand President. For nearly eight years, she worked at Express, Inc., rising to the position of Executive Vice President of Women’s Merchandising and Design. She joined Express, Inc. after 13 years in several merchandising roles at Bloomingdales, prior to which she served in various positions at Bergdorf Goodman, Bonwit Teller and Saks Fifth Avenue. She is a graduate of Lafayette College and received her MBA from Fordham University.
Fran Crevoiserat (53), has been Executive Vice President and Chief Financial Officer of Abercrombie & Fitch since May 2014 and a member of the Office of the Chairman since October 2015. Prior to joining Abercrombie & Fitch, she served in a number of senior management roles at Kohl’s Inc. including Executive Vice President of Finance and Executive Vice President of Merchandise Planning and Allocation. Prior to her time with Kohl’s, Crevoiserat held senior finance positions with Wal-Mart Stores and May Department Stores, including Chief Financial Officer of the Filene’s, Foley’s and Famous-Barr brands. She is a summa cum laude graduate of the University of Connecticut where she received a Bachelor of Science degree in Finance.
Abercrombie & Fitch Co. (NYSE: ANF) is a leading, global specialty retailer of apparel and accessories for Men, Women and Kids through three renowned brands. The iconic Abercrombie & Fitch brand embodies American casual luxury. With an updated attitude that reflects the character, charisma and confidence of today’s 20+ consumer, Abercrombie & Fitch remains true to its 125-year heritage of creating expertly crafted products with an effortless, American style. The Hollister brand epitomizes the liberating and carefree spirit of the endless California summer for the teen market. abercrombie kids creates smart, playful apparel for children ages 3-14, celebrating the wide-eyed wonder of childhood. The brands share a commitment to offering products of enduring quality and exceptional comfort that allow consumers around the world to express their own individuality and style.
Barneys taps Daniella Vitale for CEO post and Mark Lee becomes Executive Ehairman
Mark Lee is moving up to become executive chairman at Barneys New York, with Daniella Vitale succeeding him as chief executive officer
Speculation has raged over the last few months over Lee’s position at the retailer. Vitale had been chief operating officer.
Lee, CEO since 2010, has been named executive chairman reporting to owner Richard Perry.
Vitale also will report to Perry. Vitale joined Barneys New York in 2010 as chief merchant/executive vice president. In 2013, her role was elevated to chief operating officer where she oversaw all of women’s merchandising, business development, digital strategy and store operations. She was responsible for overhauling the retailer’s merchandising structure, creating operating efficiencies, as well as building a competitive and dynamic digital portfolio, where the brand’s e-commerce business has grown tenfold during her tenure.
Riccardo Tisci leaves Givenchy
Yet another seismic shift is taking place in French fashion. Riccardo Tisci, the creative director of Givenchy and the designer responsible for redefining the brand Audrey Hepburn built for the Kardashian era, said on February 2, 2017 that he was leaving the brand after 12 years. A successor has not been announced.
Bernard Arnault, CEO of LVMH Moët Hennessy Louis Vuitton, the French conglomerate that owns Givenchy, said in a statement, “The chapter Riccardo Tisci has written with the House of Givenchy represents an incredible vision to sustain its continuous success, and I would like to warmly thank him for his core contribution.”
Designer moves have become so common of late they are starting to seem more yawn-inducing than critical. (A brief list of departures, since 2015, include Raf Simons from Dior, Hedi Slimane from Saint Laurent, Alber Elbaz from Lanvin, Alexander Wang from Balenciaga, Consuelo Castiglioni from Marni and, as of last Monday, Clare Waight Keller from Chloé.) But Mr. Tisci’s amicable divorce from Givenchy, rumors of which WWD reported on last month, could have deeper repercussions.
Tisci had, after all, not only transformed Givenchy into one of LVMH’s most successful brands, but was often held up as a model for the partnership between hot young designer and heritage house. That he was willing to end what appeared to be a happy marriage suggests that the old days of designers staying in place for decades (Karl Lagerfeld has been at Chanel since 1983) may be finally, officially, over.
Linda Fargo, senior vice president for fashion and store presentation at Bergdorf Goodman, said, “I guess destabilization is the new normal.”
When Tisci joined Givenchy in 2005 the brand was floundering after being led by a quick series of creative directors, including John Galliano, Alexander McQueen and Julien Macdonald. In an interview with The Financial Times in 2011, Marco Gobbetti, the former chief executive of Givenchy, said the brand was “a mess, without an identity.” And Mr. Tisci was a 30-year-old upstart Italian with a gothic sensibility who had barely started his own line.
It seemed a surprising match, but Tisci managed to combine his own harder-edged sensibility with a certain French classicism and a dose of emotion to give Givenchy a newfound relevance: He made crosses, skulls and the perfect white shirt make sense. He was also an early adopter of social media, cognizant of the power that those platforms and influencers would have on fashion. He has 1.8 million followers on Instagram, and many of his famous friends appear in his posts as often as they do in the front row of his shows.
LVMH, which also has brands such as Louis Vuitton, Céline and Fendi in its portfolio, does not break down the performance of individual maisons in its financial results. But the number of employees at Givenchy has more than tripled since Mr. Tisci joined the house in 2005, and sales revenue is believed to have grown to around 500 million euros ($539 million) annually. There are now 72 free-standing stores worldwide (compared with seven in 2005), with a Rome flagship set to open this year, and plans for a London store are underway for next year. Last week, LVMH, the world’s biggest luxury group, posted record revenue and profits for 2016, beating expectations because of strong sales in the United States and Europe and a pickup in demand in Asia.
“Riccardo has accomplished everything a designer can do for a brand, clocking a very respectable tenure and creating a fully realized language for them,” Ms. Fargo said.
So, why leave?
Mr. Tisci said in his statement, “I now wish to focus on my personal interests and passions.” But rumors have suggested he may be headed to Versace. It would mean going home to Italy, and to a brand whose unabashed Italian sex and power-woman aesthetic mirrors his own. And Mr. Tisci is close to Donatella Versace (he shocked fashion in 2015 when he featured Ms. Versace, at least nominally a rival designer, in a Givenchy ad campaign).
Besides, the suggestion, briefly beloved of the industry, that a designer needs a timeout from the increasingly endless show seasons, which was posited when both Mr. Simons and Ms. Waight Keller left their posts, increasingly seems like smoke and mirrors. After Dior, Mr. Simons took an even bigger job at Calvin Klein, and Ms. Waight Keller is said to be moving to a different brand (Givenchy?).
Perhaps this is the answer. Once upon a time, a designer’s name was on the door, and his or her heart was in building a legacy. Now it is rare that any creatives start their own line. Rather, the biggest jobs involve putting their talents at the service of someone else’s already gilded name. That may be an interesting intellectual and creative challenge for a while, but once achieved, it no longer holds the same allure, and the search for the next test begins.
“This clearly shows that a lot of folks are about change and evolution, and both designers and brands want to be continually in motion,” said Marc Metrick, president of Saks Fifth Avenue.
We tend to romanticize “the designers” and to bestow upon them some sort of mystical, spiritual connection to the houses where they reign, maybe because what they make touches our bodies and can thus transform our lives, maybe because it involves the alchemy of invention or because designers these days have the golden glow of celebrity. But what Mr. Tisci’s move suggests — what all of this may reveal — is another, more parochial, truth: Being a designer is a job like any other. And people change jobs.
François-Henri Pinault, the chief executive of Kering, suggested when Frida Giannini was ousted from Gucci in 2014 that 10 years was probably long enough for any designer to stay at a brand, and after that it was good to mix things up (10 years also being the number most often chosen as an ideal tenure for a chief executive). At the time, it seemed like a radical idea. It does not any more.