The chief financial officer is no longer just a numbers cruncher, and the new skill set required — not to mention the stress that goes with the job — might to some extent explain the high turnover on the cfo front in the last few months.
In the last three months alone, no less than seven retailers have seen their cfo’s leave. Those include Neiman Marcus Group; J.C. Penney Co. Inc.; Nordstrom Inc.; Kohl’s Corp.; Hudson’s Bay Co.; Kirkland’s Inc., and Christopher & Banks. It isn’t just the retail sector that faced cfo changes. On the vendor side, Vera Bradley and Michael Kors Holdings Ltd. have welcomed new cfo’s. Only one or two cfo positions became open due to retirement.
According to Elaine Hughes, founder and chief executive officer of executive search firm E.A. Hughes & Co., “The cfo is the financial ‘consigliere’ and strategist to the ceo as well as to the board. The job requires a new level of sophistication.”
Over the years as retail and apparel firms have improved their financial reporting systems and have incorporated new technologies to provide real-time data, they’ve also had to look outside the box to figure out how to grow. In many instances, the decision over growth has gone beyond just opening more stores in new geographic areas. Growth now can come from the mergers and acquisitions front. Other times, real estate comes into play as companies retrench from certain markets so they can focus on the stores that best contribute to the bottom line before the next round of store openings in more meaningful locations. That’s on top of operational decisions on where to invest and how much when it comes to being “omnichannel” and operating one’s own e-commerce platform.
And at some companies, the cfo now also holds the title of chief operating officer. In a few instances, it was the chief operating officer who added on the role of interim cfo when the incumbent left the company, only to become the cfo later on while retaining the existing title of chief operating officer.
Adelle Kirk, senior vice president at Kirk Palmer Associates, also an executive search firm, said good talented cfo’s are being enticed away to firms in other sectors that can provide a better work-life balance.
With operating margins down at most retailers and fashion companies, and Wall Street taking a closer look under the hood for some reason to buy — or hold onto — the shares of any public company, the pressure to meet expectations has grown. And those pressures are likely to grow, not lessen, meaning there could be more cfo changes ahead.