New challenges, new faces.
From Ralph Lauren Corp. and Macy’s Inc. to Burberry and Dior, some of the most-coveted corner offices in retail and fashion saw turnover in 2017 as a fresh crop of leaders stepped up to help drag, push and cajole the industry into the future.
The perks and pay at the top are good, but the challenges are real. From Amazon’s e-commerce grab to the Millennial search for meaning in experience to the woes and worries of impatient investors — it all falls to the ceo to solve or settle.
As companies at large are still trying to figure out the right formula for continuing 21st-century success, prompting plenty of change in the ceo slot. The heavily indebted J. Crew Group saw former West Elm executive James Brett take the reins from retail legend Millard “Mickey” Drexler. And Jerry Storch was out at Saks Fifth Avenue-parent Hudson’s Bay Co. after just two years on the job, putting Richard Baker in the role of interim ceo.
Increasingly, boards seem ready to move quickly to correct course when a change in direction or personality doesn’t work.
Such was the case at Lauren, where Patrice Louvet took the ceo title from Stefan Larsson, who lasted only 18 months in the post, and at Burberry, where Marco Gobbetti was drafted as ceo to replace Christopher Bailey, whose dual role as chief creative officer and ceo was less than a roaring success after three years.
Bailey, who will step down as president and chief creative officer in March, found himself in the unusual and ultimately untenable position of juggling both creative and business responsibilities. Larsson, whose blueprint for Lauren’s future appears to have more or less survived his departure, seems more to have fallen short in the soft skills of connecting with the man whose name is at the top of the letterhead, chairman and chief creative officer Ralph Lauren.
“This is a partnership,” Lauren told WWD at a joint interview with the incoming Louvet at the designer’s Bedford, N.Y., home. “This is about someone I trust, and growing the business the proper way….Patrice brings a sophistication and maturity to the business that’s very important. He’ll be my partner. I don’t feel this company is at the end of the wire, it’s at the beginning.”
After 28 years at P&G, Louvet seems to be confident in his own business chops and able to appreciate his own his lack of fashion experience.
“I recognize the things I know and I know what I need to learn,” he said. “I am very determined to learn quickly.”
And that seemed to start with the Lauren culture.
“Through all my conversations with Ralph, I’m really touched by how much he cares about the people,” he said. “Yes, business is difficult, and yes, the conditions out there are challenging. But there’s a caring aspect to the culture that has really struck me from the get-go. People are the secret sauce, or the not-so-secret secret sauce.”
But as the person at the top of the organization chart, he’ll have to get cooking and quick. In today’s corporate world, he has no choice.
Asked whether the short performance window for ceo’s give him any pause, Louvet acknowledged: “It gives me pause, but I’m confident. There’s always an element of risk in a change like this. I go in with eyes wide open. I think we spent enough time together with Ralph and the board. I think we both feel there’s a good fit and we’re set up for success. Now the proof is in the pudding. We’ll need to deliver, and I’ll need to deliver.”
He is far from the only one.
At Burberry, Gobbetti, who was a superstar manager at the LVMH Moët Hennessy Louis Vuitton-owned Céline, has very clear ideas. His goals include cementing the brand’s luxury positioning, grabbing market share in leather goods, offering faster-paced deliveries and freshening up the store portfolio.
“Our growth in the past is not necessarily what will fuel our future success,” Gobbetti told analysts during a presentation at Burberry’s Horseferry House headquarters. “The luxury sector is changing. The luxury customer is also changing. They are moving away from traditional notions of luxury and are looking for what is casual, fun, what fits in their lives. They expect creativity, they care about experiences and use luxury goods to express their opinions. They want fashion and newness, and only innovating and exciting products will interest them to buy. In the digital age, they engage and expect continuous and new content.”
But Gobbetti has to prove he can make it work.
Burberry shares closed down 10 percent at 17.87 pounds after he laid out his plans for the company last month. (The stock closed down 0.5 percent to 17.23 pounds Friday.)
“Visibility remains somewhat low,” said Luca Solca, sector head, luxury goods at Exane BNP Paribas after the presentation. “The implementation of the new plan will take time to show visible results, at any rate, so we see little hurry to buy the shares.”
If there was ever anything such as a grace period for incoming ceo’s, it’s gone now. And even when successions play out in an orderly and expected fashion, investors are going to expect immediate results from the stewards of their money.
The biggest, buzziest and most anticipated change on the U.S. retail scene was the switch at Macy’s Inc., where Terry J. Lundgren was succeeded by Jeff Gennette as ceo.
Most of Lundgren’s 14 years in command at Macy’s were marked by sales and profit gains, but Lundgren himself considered preparing for own departure one of his most important accomplishments, having elevated Gennette and prepared him to take over, well in advance. Lundgren clearly feels confident about Gennette — he is stepping down as executive chairman of Macy’s as well at the end of January.
Even so, the last couple of years have been tough on the department store, leaving Gennette with an enormous task of reinventing the business and trying to pump up both the stores and Internet operations.
Coming from within the organization has given Gennette a close-up view on Macy’s strengths. “What I am focused on are three things — our team, our brand and our plan,” he said. “We have incredibly impassioned people who really want to win, and have a rich history of winning, with the exception of a couple of dry years. But they get out of bed every day ready to fight. I have a lot of confidence in the team. I was in the store organization for many years. I know their character. I know their grit.”
LVMH chairman and ceo Bernard Arnault is also a big believer in developing talent at home and last month unveiled his biggest management shuffle in five years.
Sidney Toledano, ceo of Christian Dior Couture for almost two decades, will pass the baton to Pietro Beccari, ceo of Fendi, early next year. Toledano in turn will head up LVMH Fashion Group, where he will be in charge of steering brands including Céline, Loewe and Givenchy.
“The appointment of Pietro Beccari as head of Christian Dior Couture signals a new era,” Arnault said. “He will be an excellent leader who will steer Dior toward ever-greater success in the future.”
Beccari comes to Dior with a stellar track record, having helped to propel Fendi beyond the billion-euro revenue mark by dropping its ubiquitous logo bags in favor of more upscale products, in addition to developing lifestyle destinations like Palazzo Fendi in Rome, comprising a boutique hotel and Zuma restaurant.
The nominations come on the heels of LVMH’s 6.5-billion-euro acquisition of Christian Dior Couture in July, reuniting its fashion and fragrance activities under a single umbrella, and making Dior the second-largest brand in the group’s fashion division, behind Louis Vuitton and ahead of Fendi.
So Dior, like retail and fashion, is being made anew — and by new hands.