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The Warnaco Group Inc. is eyeing acquisition targets, and a new chief executive officer will lead the effort.
Warnaco on Tuesday named Helen McCluskey president and chief executive officer, effective Feb. 1. McCluskey, 56, succeeds Joe Gromek, 65, who will retire. She is currently chief operating officer, a post she was promoted to in October 2010. Gromek joined Warnaco as president and ceo in 2003.
McCluskey said, “I look forward to working together with our team to build on the strong foundation we have in place as we pursue our strategic goals and next phase of growth.”
Gromek said, “For me, it has been an extraordinary and rewarding experience to lead this company over the past nine years, and while I am deeply proud of the many accomplishments we have achieved, the one I am most proud of is the team we have built.”
Charles R. Perrin, Warnaco’s nonexecutive chairman, said, “Since Helen’s arrival, she has impressed the board, customers and colleagues alike, and she has demonstrated leadership qualities that we believe will ensure Warnaco’s continued success.”
Gromek said in a telephone interview, “I turned 65 this past September. I signed a three-year contract with Warnaco that expired in March 2011. We extended it for one year. Based on some macro-economic factors and the global recession, it made sense to stay for another year.”
He said the board’s due diligence process, with external assistance, resulted in unanimous support for McCluskey as the next ceo.
As for Gromek’s plans, he said: “I sit on the Wolverine Worldwide and Children’s Place boards. I see myself doing some consulting. My wife and I are heavily involved in philanthropic work involving health care, education and kids.…This is a good time to give back.”
Perrin noted, “Under Joe’s leadership, Warnaco has thrived, refining its portfolio of brands, expanding its retail operations to a current 1,500 points of distribution and growing its international presence, now accounting for 60 percent of annual revenue.…Warnaco’s share price has risen by more than 500 percent since he joined the company.”
McCluskey in the same telephone interview noted that the company now has a solid footing and foundation base compared to when Gromek joined the firm in 2003.
As for the future, McCluskey essentially said there would be no major changes, although one might see a shift in focus more towards the consumer even though the “wholesale business continues to be a big business” due to the consumers it targets. That shift will likely mean a greater focus on direct-to-consumer, which is driving Warnaco’s retail business.
At the third-quarter conference to Wall Street, Gromek said to analysts, “Asia and Latin America continue to lead the growth.”
Gromek also told analysts that Warnaco’s business in China, “approaching $200 million by yearend, remains a dynamic growth vehicle as we aggressively expand our direct-to-consumer penetration.”
Retail revenues overall rose 30.5 percent in the quarter, to $186.2 million, with comparable-store sales up 2 percent. “Direct-to-consumer revenues now represent 29 percent of total company sales and we expect that percentage to climb significantly in the fourth quarter,” Gromek noted.
McCluskey also said that one opportunity for Warnaco is to engage the female customer more to build its women’s business. “It’s an enormous opportunity as our women’s business is not as developed as our men’s business,” she said.
While McCluskey isn’t ruling out opportunities for acquisitions, the focus initially will be on growing market share in the geographies where the company already has an existing business. She disclosed that there is a short list of possible targeted firms that Warnaco is eyeing. They’re not necessarily women’s businesses, but more global lifestyle brands that have dual gender businesses, which fits better into Warnaco’s strategy, the future ceo said.
As for consistent on-again-off-again rumblings in the marketplace and on Wall Street about discussions regarding a merger between Warnaco and PVH Corp., Gromek said emphatically, “That is a board question.”
The outgoing ceo emphasized that, based on Warnaco’s ambitious strategic plan today, “There is tremendous potential opportunity to grow shareholder value as an independent company.”
According to a regulatory filing with the Securities and Exchange Commission on Tuesday, McCluskey inked an employment agreement effective Feb. 1 for her new role at Warnaco. The filing listed an “annual base salary of $1 million and an annual target bonus opportunity of 110 percent of her annual base salary.” In addition to other awards, she is also bound by a “perpetual confidentiality covenant, a 12-month post-termination noncompete,”
McCluskey joined Warnaco in 2004 as group president, intimate apparel. In June 2007, she was given the added responsibility of global oversight for the firm’s swimwear brands. When McCluskey became chief operating officer, she added to her responsibilities oversight of the Calvin Klein Jeans and Chaps brands, as well as all of the firm’s international businesses and its global supply chain and sourcing operations.
Prior to joining Warnaco, she was group president of the moderate women’s sportswear division at Liz Claiborne. Before that, she was at Sara Lee for 18 years in the firm’s intimate apparel units, serving as president of Playtex Apparel from 1999 to 2001.