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.
Exclusive: Nicola Formichetti is parting ways with @diesel after nearly four years. Formichetti, who served as Lady Gaga’s stylist in 2009, joined Diesel in 2013 as creative and artistic director. His first show debuted in Venice with a show held at the Venetian Arsenal. #wwdfashion #wwdnews
The polo shirt - an icon of preppy style - is roaring back into fashion in many creative guises, like this A-line polyester top from @carven, worn with @31philliplim cotton and elastane pants. Designers stretched a fashion classic into all kinds of new permutations this season. See how @mayteallende styled the preppy trend on WWD.com #wwdfashion (📸 : Kinya)
(Market Editors: @andrew_shang and @elmercer, Makeup: @amandawilsonmakeup using @fentybeauty, Hair: @gonn24, Model: @bara_holotova at @women360mgmt)
“I do like period [projects] a lot because I like creating those worlds, a world that is different from today," costume designer Mark Bridges said about the '50s British couture featured in @phantomthread. Bridges created the overall aesthetic and individual fashion looks for the film, which stars Daniel Day-Lewis, Lesley Manville and Vicky Krieps. Pictured here is a gown he designed for Krieps who plays Alma – the love interest of Day-Lewis' character, Reynolds Woodcock. #wwdfashion
@prada is embracing the holiday season with a series of short movies about the art of gift-giving. "The Postman's Gifts", which was directed by American filmmaker Autumn de Wilde, focuses on the brand's signature Prada Galleria bag and features Elijah Wood as the postman. In the first two episodes, Wood's delivers the iconic bag to @emmaroberts, who plays herself as a movie star, and Sasha Frolova. #wwdfashion
“I think I never met the person while we were working,” Vicky Krieps said of Daniel Day-Lewis, who she plays the love interest of in “Phantom Thread.” Day-Lewis remained perennially in character, so much so that she feels she’s just meeting him now. “It’s interesting to see how different he is in real life to the character,” Krieps said. WWD sat down with the 34-year-old actress to talk about her new role in the period film, which brings the fifties’ gender dynamics into the mix. Read more on WWD.com. #wwdeye (📷: @lexieblacklock)
@gucci has expanded its “Places” project to include six new cities. The initiative, which was first unveiled in July, aims to invite people to explore inspirational locations for the brand. On the list is the Biblioteca Angelica library in Rome pictured here. See the other five new venues on WWD.com. #wwdfashion (📷: @massimo_listri_official)
#ad From tools to lashes, WWD rounded up wellness and beauty products guaranteed to take your skin care and makeup routines to the next level in 2018. Follow along as @laceandleatherbyelyse, @ashnfashn and @elleisalwayshere experiment with these products on their Instagram profiles and blogs. #NewYearBetterYou
Blogger @camilacoelho is one of the fastest growing beauty influencers around the world. The bilingual blogger has worked with brands like @revolve Beauty, @dior, @louisvuitton and more and has an Earned Media Value of $34,338,441, according to @tribedynamics. But Coelho isn’t the only influencer making a major impact — head to WWD.com to see the other fastest-growing influencers in six key global markets. #beautyfridays (📷: @zefashioninsider)