NEW YORK — Ralph Lauren Corp. has promoted Christopher H. Peterson to president, global brands.
This story first appeared in the April 3, 2015 issue of WWD. Subscribe Today.
The position is a new one, and reporting to Peterson will be the global brand presidents, the chief financial officer, global real estate and investor relations. Peterson joined the company in 2012 from Procter & Gamble Co., where he held several senior corporate and operational roles. He will continue to report to Ralph Lauren, chairman and chief executive officer.
Peterson’s promotion was one of several management changes aimed at more effectively aligning senior leadership roles with its previously disclosed organization shift to a global brand management business model.
According to the company, Peterson’s experience in strategically transforming business and operating models from regional- and market-driven organizations to global brands during his tenure with P&G will enable him to play a key role in directing Lauren’s organizational transformation.
Jackwyn Nemerov remains president and chief operating officer and a member of the company’s board of directors. Reporting to Nemerov will be the group presidents for Europe, Asia-Pacific and the Americas, in addition to wholesale, retail, e-commerce and licensing. Nemerov joined the firm in 2004, was named to the board in 2007 and will continue to report to Lauren.
Valérie Hermann remains president of Ralph Lauren Luxury Collections, also reporting to Lauren. She joined the company in April 2014, having worked at Reed Krakoff, Christian Dior and Yves Saint Laurent. Reporting to Hermann are the Ralph Lauren Luxury and RRL Global Brand teams and U.S. Luxury and RRL Retail formats.
Mitchell A. Kosh, previously executive vice president of human resources, has been elevated to executive vice president and chief administrative officer. He will lead the integration of key functional areas to align with the new organizational structure. Reporting to Kosh will be the global heads of human resources; information technology; legal, corporate services and facilities; internal branding and communications, and corporate social responsibility. Kosh, who joined the company in 2000, will continue to report to Lauren.
Robert L. Madore, previously senior vice president of finance, has been promoted to senior vice president and chief financial officer. During his tenure at the company, he has held several key financial and operational roles. Reporting to Madore will be the accounting, finance, treasury, tax and internal audit functions. In addition, he will share oversight and management of divisional financial operations. He joined the company in 2004 and will continue to report to Peterson.
“I have tremendous confidence about the future of this company and the opportunities for our brands around the world,” Lauren said. “We have an experienced and proven management team in place. As we move to a new global organizational structure, these executive leadership changes will allow us to maximize the potential of our brands and drive global growth.”
Omar Saad of Evercore ISI wrote in a research note Thursday that he viewed the key management changes “positively” as Lauren continues to radically change its operating structure. “We are very encouraged by the moves, as they signal acceleration in the company’s critical organizational transformation which we believe is necessary to succeed in today’s global omnichannel environment,” the note said. He wrote that Lauren was shifting to a platform centered around brands and consumer segments from one built around channels and regions, “and it reminds us of the transformation Nike began eight to nine years ago, shifting from product categories to sport-specific divisions. “We are fully confident in Chris Peterson’s ability to execute and lead this transformation and position the company for a renewed phase of growth,” Saad wrote.
He pointed out, “We recognize that we are likely to see a couple of quarters of relatively choppy performance as these changes are implemented, particularly as Ralph is confronting some significant macro and company-specific headwinds. The company is undergoing a significant amount of change at a time when the business has slowed and is facing increased volatility as a result of FX headwinds, weaker factory outlet traffic, and sluggish U.S. full-price retail comps. Ultimately, these organizational changes are critical to properly aligning the company with the future of consumer behavior and should meaningfully accelerate shareholder value creation over time, but the positive impacts may take a few quarters for the market to see and fully appreciate.”
Christian Buss, an analyst at Credit Suisse, said, “I think Ralph Lauren has been engaged in a multiyear rationalizing of their organization. We think what they’re in the process of doing is taking a regionalized business and turning it into a centralized business, with brand and back office control in New York.” He believes it will unlock operating margin in the business. Buss considers Peterson’s elevation a good move. “It’s important to appreciate he was a part of one of the largest SAP implementations” at P&G. “He has experience managing a rationalization of a corporate organization,” Buss said.
During its conference call in February, Lauren revealed a few details about its new global brand management operating model, which it said could yield $100 million in annualized savings once fully implemented. The move was said to help offset external issues down the road, especially if currency pressures continue and store traffic remained a risk for the company. For the third quarter ended Dec. 27, the company posted a rare miss on profits and revenues, and lowered the fourth-quarter bar with its second guidance revision downward in the past year. Peterson said the company bought back a number of licenses — both by geographic region and product category — and had begun investing in systems to view its data on a global basis. He said the new structure would unleash the power of the company’s different brands and provide brand consistency.