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NEW YORK — LVMH Moët Hennessy Louis Vuitton has raided Oscar de la Renta Ltd. of its chief executive officer, who is believed to be headed to the helm of Marc Jacobs International.
Jeffry M. Aronsson, a former corporate attorney who led a turnaround of de la Renta’s business affairs during the past decade, announced his resignation on Monday, saying he had been recruited by LVMH. Although he would not comment on his specific plans, several sources said Aronsson would join Marc Jacobs, possibly replacing Scott Bowman, who joined the company as ceo almost a year ago.
Robert Duffy, the longtime president of Marc Jacobs who helped found the company, declined to comment on Monday, while Bowman, who had extensive retail experience before joining the firm, said he wasn’t aware of any changes in order. “I’m not looking to leave, but at this point, I cannot say anything,” Bowman said.
In announcing his resignation from Oscar de la Renta, Aronsson described the decision to leave as a melancholy one, made more difficult by the bonds he developed with the designer since de la Renta persuaded him to give up a career in corporate law to become his president and ceo in 1994.
While affable and consistently enthusiastic about the garment business, the 49-year-old Aronsson has also maintained the careful and measured approach of a lawyer during his tenure at the designer company, building a reputation in the industry for improving the image of its product through disciplined licensing, without damaging the brand. Speaking to that point, de la Renta has half as many licenses as when Aronsson joined the company, but triple the sales.
“This has been an incredible experience for me,” Aronsson said in a telephone interview Monday. “The mission I set out to accomplish has been achieved, and now I am going to undertake a brand new challenge on an expanded playing field.”
If Aronsson is headed to Marc Jacobs, it would mark the third top-level executive reorganization at an LVMH brand in recent months. In September, Fred Wilson, a close friend of Aronsson’s, moved from his role as ceo of LVMH Fashion Group, Americas, to become ceo of Donna Karan International, and, in December, Yves Carcelle, the head of LVMH’s fashion and leather goods division, took over the ceo reins from Marcello Bottoli at Louis Vuitton, where Jacobs is also the designer. Jacobs and Duffy remain partial owners in the Marc Jacobs business.
An announcement about Aronsson’s next position could come this week.
“We will certainly miss Jeff and we wish him the best of luck,” de la Renta said on Monday. “At this point we are not planning on naming a successor. We have a great team and we ended the year on a financially strong foot — and as one of the top four resources at Bergdorf Goodman and as the best-selling American designer at Saks Fifth Avenue.”
Since de la Renta stepped down as Balmain’s couturier in July, the designer said he has more time to devote to his namesake company. This is a primary reason for not filling the position, de la Renta said.
At de la Renta, Aronsson has developed a track record for attracting key talent, as well as building the designer’s business in emerging markets in Asia and Latin America, which are both viewed as important areas of growth for Jacobs, a business with sales estimated at more that $50 million through its collection, Marc by Marc Jacobs and retail operations. Marc Jacobs is continuing its retail expansion in Asia, with new collection stores at the Landmark in Hong Kong and the Regent in Taipei, a Marc by Marc Jacobs store in Hong Kong’s Pacific Place and explorations taking place in Beijing and Shanghai.
His legal background has also proven to be an asset to de la Renta, as Aronsson’s contractual skills have resulted in better control over existing licensed products, as well as the recent introduction of three categories: bridal, intimates and furniture. De la Renta has about 15 licenses now, down from 31 when Aronsson joined the firm nine years ago, as de la Renta’s former partner, Gerald Shaw, with whom he acquired the company from Shaw’s father, Ben, in 1965, was winding down his involvement. The company’s long-standing debts, which once weighed upon its future prospects, have since been eliminated, and sales of de la Renta’s collection business are now estimated at $50 million a year, plus an additional $600 million at retail with licensed goods.
All of this, as many of de la Renta’s colleagues have observed, appeared to be a preamble for de la Renta’s next big stage, either cleaning up the company’s financials to prepare for an initial public offering or making it a more lucrative target for acquisition by a luxury conglomerate, like LVMH or Gucci Group. But de la Renta himself has resisted ceding control of the firm, not just in terms of an acquisition, but of giving up any percentage of control, according to insiders. This might have grown into a frustrating circumstance for its chief executive. One source said Aronsson approached the designer in the past year with his own offer to buy out the company, but that he was refused.
“That is something that if it were or were not true, it isn’t the kind of thing I would talk about,” said Aronsson, who, despite the emotional difficulties of his announcement Monday, is said to remain on very good terms with de la Renta.
Aronsson also did not hesitate to champion de la Renta’s point of view regarding his financial options, even the rejection of capital that could have financed new expansions, considering the company has never been better positioned than it is now to avail itself of such opportunities, he said.
“It really depends at this point on Oscar’s objectives,” Aronsson said. “It doesn’t need to happen.
“Everything we’ve done, from paying off debt to launching new initiatives, has been self-financed,” he said. “I came into this business with a corporate law and securities law background. I used to write risk factors for a living and I was very aware of the rewards of going public, but also the pitfalls. I can tell you that the issue of an acquisition or an offering was not a source of frustration. In fact, it was the contrary.”
According to de la Renta, the company is poised for growth this year with the addition of the bridal license — it debuts officially at retail this month and is expected to bring in approximately $10 million in the first few years, according to industry estimates. The home furnishings collection with Century Furniture Industries debuted at the October furniture market in High Point, N.C. This past summer, the company also opened a showroom in Düsseldorf, Germany, to distribute shoes and accessories in Switzerland, Austria and Germany before expanding throughout the rest of Europe. As reported, de la Renta also plans to renovate and expand its 550 Seventh Avenue headquarters this year. The space will be updated to match the company’s retail concept — de la Renta is currently scouting real estate for his first freestanding store. De la Renta has said he is targeting the Upper Sixties and Seventies on Madison Avenue in New York, as well as a potential spot in Las Vegas.
De la Renta has enjoyed something of a renaissance in recent years, stocking the company with a cast of young and socially dexterous employees, such as the designer’s stepdaughter, Eliza Reed Bolen, vice president of licensing; Alexandra Hamilton, vice president of communications and public relations, and Adam Lippes, a vice president and creative director who, as reported, is reducing his role at the company to focus on the development of his own fashion collection. While the staff and de la Renta’s recent collections have offered a renewed air of vitality to one of the longest running success stories on Seventh Avenue, Aronsson has also made efforts to make management and operations tighter and more efficient at the company and to improve customer service, all of which has had an obvious affect on the bottom line: “Sales are the most profitable they’ve ever been, quality is consistently superlative, deliveries are timely and customers are happy,” said Aronsson, who has, during his residence in the garment district, developed a language that blends the idioms of Seventh Avenue with those of more contemporary corporate American boostering.
“It’s hard to summarize nine years of…I don’t even want to call it work, because it’s been such a fantastic experience,” Aronsson said. “What it really has been is that Oscar and I have been working over the past couple of years to develop a team of winning people. The brand building and operational results speak volumes of these people who are proactive, self-motivated and passionately dedicated to the company’s mission.
“I think the most important leave-behind as far as I’m concerned is that the company has a winning team in every one of its departments, whose members are focused on supporting Oscar’s creative genius and on the company’s mission to continue the healthy growth of its business and its brand, while maintaining integrity, determination and hard work as core values,” he said.