NEW YORK — American Eagle Outfitters and Bebe Stores are fighting over a top merchant.
Gregory Gemette, formerly AEO’s vice president and general merchandise manager of women’s, is expected to join Bebe next week in the new post of senior vice president and chief merchandising officer. However, retail sources say AEO has been attempting to block or stall the move.
Sources also said executive recruiter Korn/Ferry International, which placed Gemette at Bebe, is in the middle of the mess, which reportedly centers on whether or not Gemette violated his contract at AEO. Korn/Ferry and Bebe declined to comment Wednesday. American Eagle executives couldn’t be reached for comment. One source said a resolution could come soon.
Lately, retailers have been battling over talent, in and out of the courts. One reason is that top talent is scarce and turnover is frequent. Also, contracts often include restrictive “noncompete” clauses, which are sometimes vague. Last month, for example, Limited Brands and May Department Stores completed their court battle over noncompete provisions. A decision is expected this month. Limited has been seeking to hire former Foley’s chairman Mark Weikel for a senior post at Victoria’s Secret Stores, but May Co. felt that he violated a noncompete provision. Limited sued May, contending that the Foley’s division of May is not a competitor to Victoria’s Secret, and that Weikel wasn’t violating his contract.
Taken together, the AEO/Bebe and May/Limited cases could have implications for how contracts are written and interpreted, including noncompete provisions.
Since Bebe’s announcement last month about Gemette’s appointment, AEO has reorganized its top ranks in an attempt to reverse recent weak sales trends. Just last week, Jim O’Donnell was named chief executive officer and Roger Markfield was tapped as vice chairman and president of the American Eagle division, responsible for merchandising, design, production and marketing. Previously, O’Donnell and Markfield were co-ceo’s. Also, Susan Miller was named cmo of the AE brand.
AEO operates 735 AE stores in the U.S., and 63 in Canada. Bebe operates about 170 Bebe stores and 12 Bebe Sport stores. Bebe’s earnings rose 18.6 percent last quarter.