Eugene Kahn, the former chief executive officer of May Department Stores Co., has resigned as ceo of Claire’s Stores Inc., the global women’s accessories and jewelry retailer.
This story first appeared in the January 9, 2012 issue of WWD. Subscribe Today.
Kahn has been ceo of the chain since 2007, when it was acquired for about $3.1 billion and taken private by Apollo Management.
The Chicago-based firm said that James Conroy and Jay Friedman, the president of the company and of its North American division, respectively, would lead the firm as part of a new interim office of the ceo while the board seeks a successor from among “internal and external candidates.” The two will report to the board of Claire’s.
Claire’s gave no reason for Kahn’s departure, which follows a third quarter he characterized as a disappointment. In disclosing the ceo’s resignation, the company said that its consolidated same-store sales for November and December increased 1.5 percent, with a 3.9 increase in North America offset by a 3 percent decline in Europe. The figures are computed in local currencies, neutralizing the effect of currency fluctuation, and don’t include results for its 381 franchised or licensed operations in markets including Japan, the Middle East and Russia. As of Oct. 29, the company operated 3,047 Claire’s and Icing stores in North America and Europe.
Peter Copses, chairman of Claire’s, said, “We thank Gene for his tireless efforts as ceo of Claire’s since the going-private transaction in 2007. Under Gene’s leadership, the company has improved its merchandising, more clearly defined its target customers, embarked on a new store program in Europe and launched an e-commerce site.”
He added, “We are fortunate to have a strong and deep team at Claire’s and are confident in Jim and Jay’s ability to lead the company as the board conducts a search for a new ceo.”
In the third quarter ended Oct. 29, Claire’s profits fell 48 percent, to $1.9 million, as interest expense rose 17.3 percent to $43.5 million. Sales were up 2.2 percent, to $356 million, while falling 2.2 percent on a comparable-store basis, with European comps down 7.1 percent versus a 0.8 percent increase in North America. Kahn said at the time that officials at the firm were “clearly disappointed with our same-store sales performance” but were confident the company had identified factors contributing to the decline and steps needed to fix it.
Long-term debt stood at $2.4 billion on Oct. 29, up 7.1 percent from the Jan. 29 level, and year-to-date interest expense through the third quarter grew 11.3 percent to $134.1 million. The net loss for the nine months mounted to $27.8 million from $17 million in the 2010 period even as net sales rose 5.6 percent to $1.06 billion.
Before joining Claire’s, Kahn spent 15 years with May and was chairman and ceo when he left in 2005 just before its acquisition for $11 billion by Federated Department Stores, which has since been renamed Macy’s Inc.