Change is not only inevitable, but often healthy. Restorative, even.
This story first appeared in the August 19, 2015 issue of WWD. Subscribe Today.
A new chief executive officer can tackle old problems in fresh ways and root out unseen opportunities.
But when the industry starts to look like a game of musical chairs, it can also be a sign that something bigger is passing through.
Abercrombie & Fitch Co., American Eagle Outfitters Inc., Iconix Brand Group Inc., Chico’s FAS Inc. and Vince Holding Corp. are all on the hunt for new leaders. And while those companies each have their own strengths and weaknesses, they are all buffeted by systemic changes facing fashion, from slower mall traffic and the digital revolution to the still-uncertain economy and weak discretionary spending.
Finding a qualified candidate who can speak to front-line employees, vendors and Wall Street is tough enough. But experts claim fashion has also lost some of its appeal. The young hotshots are looking not to take the corner office of, say, a teen chain in need of a turnaround, but to take on that hot tech property or explore other areas of retail.
Who takes these ceo jobs and the course they set will speak volumes about where fashion is headed.
The Five Looking For Leaders
Abercrombie & Fitch Co.
FILLING IN: Arthur Martinez, executive chairman
CORNER OFFICE: Vacant since December
FORMER CEO: Michael Jeffries
Gen X might have come of age with images of stripped Abercrombie & Fitch models, but the younger generation now targeted by the brand has been looking for something a little less in-your-face.
“Our company ran as a singular business model for two decades,” said Martinez. “That model became less relevant in a changed marketplace, with new customer expectations.”
While Martinez banished the beefcakes made famous by Jeffries, the brand’s former lodestar, just how much the retailer changes will be deter- mined by the next ceo.
Abercrombie sounds as if it’s taking its time and a measured approach.
“A new ceo will be appointed at an appropriate time to continue this work, and the board is deeply engaged in that process,” Martinez said.
American Eagle Outfitters Inc.
FILLING IN: Jay Schottenstein, executive chairman and interim ceo
CORNER OFFICE: Vacant since January 2014
FORMER CEO: Robert Hanson
American Eagle is starting to get some of its mojo back — first-quarter comparable-store sales rose 7 percent after a 10 percent drop a year earlier — but it’s doing so with the permalance help of Schottenstein, who previously served as ceo of the teen chain for a decade.
Already, Schottenstein’s been interim ceo for more than a year-and-a-half. And while the company’s looking for someone to lead the retailer into its next chapter, Schottenstein is clearly in charge.
When RBC Capital Markets analyst Brian Tunick prefaced a question on margins on the company’s first-quarter conference call with, “Understanding you don’t have a new ceo announcement yet…,” chief financial and administrative officer Mary Boland said, “We do have a ceo sitting here at the table today and he’s been instrumental in helping the leadership team drive the kind of results that we’ve seen and we expect that to continue as we move forward.”
Iconix Brand Group
FILLING IN: Peter Cuneo, chairman and interim ceo
CORNER OFFICE: Vacated this month
FORMER CEO: Neil Cole
Iconix made its name buying and then licensing out brands as diverse as Badgley Mischka, London Fog, Ocean Pacific and Ecko Unltd., building up sales, but not inventory.
Now the company’s hit a rough patch — very rough, with everything from declining sales and lawsuits to inquires from the Securities and Exchange Commission — and Cole is out, serving as a “special adviser” until the end of September.
Leading for now is Cuneo, who previously led Marvel Entertainment.
“The board believes strongly in the future of Iconix’s underlying business, as signified by its diversified portfolio of iconic consumer brands, outstanding global licensing network and strong free-cash-flow generation,” he said.
Now to find someone to carry that torch forward.
Chico’s FAS Inc.
OUTGOING CEO: David Dyer
TIMING: In May, Dyer revealed plans to retire next spring.
TRANSITION: Dyer will shift to vice chairman when a replacement is named.
Dyer jumped into the maw of the financial crisis and took the reins of Chico’s in January 2009, boosting the firm’s sales by more than $1 billion, to $2.7 billion last year.
The retailer — which operates Chico’s, White House | Black Market, Soma Intimates and Boston Proper — has built a chain of 1,552 doors by courting the 35-and-older crowd. But it’s in the midst of some rightsizing and said in February it would shutter about 120 stores over three years.
Vince Holding Corp.
OUTGOING CEO: Jill Granoff
TRANSITION: Granoff resigned last month, but “will remain ceo through a transition period.”
Granoff described her decision to pass the reins at Vince as “bittersweet.” Shareholders were just bitter and took the abrupt departure as a sign of trouble, sending the stock down 18.7 percent the following day.
The pressure has been growing at the contem- porary brand — which has 2,500 points of wholesale distribution, 32 stores and 10 outlets and has seen its stock lose about two- thirds of its value since going public in 2013. Sun Capital Partners still owns a majority of Vince and things started to seem amiss when co-ceo of Sun Capital Marc Leder succeeded Granoff as chairman in June, just before the company lowered its outlook for the year.