NEW YORK — Shares of Kenneth Cole Productions Inc. fell 7 percent Monday after the company said chief executive officer Jill Granoff had resigned and it posted fourth-quarter results that fell below analysts’ expectations.
Granoff resigned her posts as both ceo and director. The company said her resignation was by mutual agreement.
Kenneth Cole, chairman, founder and chief creative officer, will become interim ceo. He was ceo prior to Granoff’s arrival from Liz Claiborne Inc. in May 2008.
Additionally, Paul Blum returned to the company as vice chairman. Blum, a 15-year veteran of KCP and president from 2002 to 2006, became ceo of David Yurman in February 2006. His plans to leave the firm were announced last June.
Known for her operations acumen, Granoff is credited with engineering KCP’s turnaround. She spearheaded the deal that saw Kenneth Cole Reaction men’s wear become a Macy’s exclusive brand and the move to bring the design of the company’s women’s wear collection in-house, following a licensing arrangement with Bernard Chaus Inc.
“Over the past three years I’ve worked with a great team on a great brand,” Granoff said. “Together we’ve returned the company to double-digit growth and profitability within a challenging business environment. I look forward to the future and exciting opportunities ahead. I wish Kenneth and the team continued success.”
According to Cole, the firm hasn’t yet initiated a ceo search.
Speaking of Blum, Cole said, “One role Paul will play is helping us focus and execute on our strategic agenda, and our intention is to stay focused and maintain our current focus on efficiency [as] we continue to manage the company in a fiscally responsible way. We will explore strategic opportunities in leveraging the brand.”
He pointed out that in the last few years, KCP has become more efficient, and that will continue.
Steven L. Marotta, analyst at C.L. King & Associates, commented, “Paul Blum was an integral part of the company’s growth strategy. Bringing him back adds a new dynamic that is viewed as a net positive. The company has been absolutely aggressive in closing underperforming stores. While that’s a good thing, there is some pain ahead from an inventory liquidation standpoint. There is also an additional aspect of uncertainty with management tenure [at KCP typically] being short-lived. The proof will be how the company executes six to 12 months from now.”
In a note sent to clients on Monday, he said Blum is “seen as the ‘front-runner’ for the permanent ceo role.”
The reshuffling came as KCP said it lost $2.7 million, or 15 cents a diluted share, for the fourth quarter ended Dec. 31, compared with a loss of $52 million, or $2.88, a year ago. The results reflect the acceleration of the closure of underperforming stores. Nonrecurring charges for lease terminations and severance were $6.3 million, or 35 cents a share on a pretax basis.
Even adding back the charges, profits fell well short of the 31 cents a diluted share Wall Street expected.
Revenues rose 10.5 percent to $120.8 million from $109.4 million, which includes a 9.5 percent increase in sales and a 1 percent increase in wholesale volume. Consumer direct revenues were up 16 percent, reflecting a 14.1 percent gain in same-store sales from liquidation and clearance activity with the store closings.
For the year, earnings were $2.1 million, or 11 cents a diluted share, against a loss of $63.2 million, or 52 cents, last year. Revenues rose 11.4 percent to $457.3 million.
Shares of KCP closed at $13, down 98 cents, in trading Monday on the New York Stock Exchange.
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye