NEW YORK — Ken Pilot, president of Gap International, will become chief executive officer of J. Crew Group Inc. on Sept. 9, ending a four-month search for new leadership at the struggling J. Crew brand but opening up another senior post at the also struggling Gap Inc.
The Gap is already looking for a successor to its ceo Millard “Mickey” Drexler, who plans to retire soon, possibly before the end of the year. Late Monday, when J. Crew announced that Pilot was coming on board, there was instant speculation that he may have been tired of working in the shadow of Drexler, particularly as it became apparent that the organization would not tap him to succeed Drexler.
Pilot’s move is a coup for J. Crew, considering the company has been lacking a leader with solid retail experience for some time. Its future hinges on building up the retail side of the multichannel brand and possibly one day going public. While J. Crew’s catalog business is considered close to saturation level, there is a huge opportunity in adding retail locations and pumping up productivity and image at the existing stores. Currently, the firm operates 146 retail stores and 43 outlets, as well as the catalog and online businesses. Last year, the company posted $398 million in retail sales, $135.3 million in catalog sales, while volume was $122.9 million on the Internet and $85.1 million with outlets. For fiscal 2001, J. Crew had net losses of $11 million versus net income of $11.9 million the previous year.
Pilot succeeds Mark Sarvary, who left in May. Sarvary, considered an operations specialist, was named ceo in May 1999, after serving as president of Nestlé Frozen Foods. He’s been credited with pumping up management in the design and merchandising areas and implementing stricter controls, but was criticized for allowing the brand image to slip. J. Crew’s image was created by Emily Woods, of the J. Crew founding family. She continues as chairman of the company and has about a 19 percent stake in the business, while Texas Pacific owns roughly 60 percent.
Pilot will report to the board of J. Crew. Dick Boyce, an executive with Texas Pacific, has been acting ceo. Pilot will also be on the board.
Pilot, who is 41, spent the last 13 years at Gap, and aside from Drexler, has been among the highest profile executives at the San Francisco-based specialty retailer. He’s been on his second tour of duty at the $1.6 billion, 650-unit Gap International. In between tours, he served as president of Gap Brand Worldwide, where he was responsible for merchandising and field operations in the U.S., U.K., France, Germany, Japan and Canada. He stayed there for a short time until Gap reversed its earlier decision to combine Gap U.S. with Gap International. Drexler reportedly became discontented with Gap’s performance and became anxious to take a more hands-on role at the sagging brand.
Since 1989, Pilot held merchandising jobs at Gap, including divisional merchandise manager for The Gap and Banana Republic divisions, and senior vice president of Gap Outlets. He began his career at Macy’s in 1984.
In a statement, Pilot cited J. Crew’s “tremendous growth potential.” He said he looks forward to building upon the brand’s “strong heritage as we focus on driving comp store sales and improving profitability.”
The search was conducted by Robert Kerson and Suzy Stewart of Korn/Ferry International. “J. Crew was in great need of someone who understood a business similar to theirs,” Stewart said. “Ken in his role in Gap International had to be a bit of a pioneer, but he grew Gap International into a formidable force. That’s what J. Crew needs to do on its retail front.”
Meanwhile, there’s been no shortage of speculation about candidates for Gap ceo. The latest focus is on Andrea Jung, head of Avon. Other rumors focus on Jeanne Jackson, a former Banana Republic ceo, as well as Roger Farah of Ralph Lauren, and Paul Charron, ceo of Liz Claiborne, though Gap is also searching outside the retailing and fashion industries.