American Eagle Outfitters Inc. on Thursday named Roger Markfield, former chief merchandising officer and co-chief executive officer, to the newly created position of vice chairman and executive creative director. Markfield, the merchandising guru who helped the Pittsburgh-based company identify its target customer, most recently was vice chairman of the AEO board.
Markfield’s appointment is another example of companies looking to saviors to lift stock prices and restore confidence in jittery investors. Some are dusting off retired executives, others are giving trusted board members full-time responsibilities and yet other firms are handing over the reins to founders who had stepped back from day-to-day activities.
“I am extremely pleased to have Roger’s full-time commitment as we respond to the current business challenges,” said Jim O’Donnell, AEO’s ceo. “Roger brings proven creative vision and merchandising talent. Most importantly, his successful history and connection with the AEO brand will be instrumental to [the company’s success].”
Many corporate boards believe those associated with a brand’s beginnings have the vision to set the company on the right course. Last week, Gregory Scott, ceo of Bebe, left the company. Founder and chairman Manny Mashouf stepped forward and is assuming Scott’s responsibilities as ceo.
This month, with its stock price in free fall, Starbucks fired its ceo, Jim Donald, and turned control over daily operations to Howard Schultz, chairman and architect of the coffee chain’s early success.
It’s clear why AEO is seeking the assistance of an old hand. The retailer’s profits for the third quarter ended Nov. 1 dropped 57 percent. Net income fell to $42.6 million, compared with $99.4 million in the previous year-ago quarter. Total sales increased by 1 percent to $754 million, compared with the same 2007 quarter, while comparable-store sales fell 7 percent, a 9 percent difference compared with a 2 percent increase in 2007.
Acknowledging the difficulties facing AEO, O’Donnell, speaking at the ICR XChange Conference in Dana Point, Calif., on Thursday, said, “The environment will remain challenging and we’re planning for it with negative comp expectations. We’re managing to lower inventories, particularly in women’s, taking a very conservative stance until we see signs of the business rebounding.” Capital expenditure forecasts were lowered to $110 million to $135 million versus $250 million to $275 million in 2008, and there will be just 12 American Eagle stores and 17 aerie units opening this year.
Markfield, 66, signed an agreement to serve as an adviser to AEO through 2012 after he transitioned from president to a “reduced schedule” in February 2006. Markfield spearheaded development of the Martin + Osa brand for 28- to 40-year-old men and women. But Martin + Osa got off to a very slow start. AEO in 2007 said the fledgling chain was being repositioned.
Markfield joined AEO in 1993 as chief merchandising officer.