A SHOCKER AT SAKS: BRAVO LEAVING TO JOIN BURBERRYS AS ITS CEO
Byline: David Moin / With contributions from James Fallon, London
NEW YORK — Rose Marie Bravo, Saks Fifth Avenue’s president and one of the industry’s fiercest competitors, dropped a bombshell Thursday, announcing she is leaving the chain at the end of this month to become chief executive officer of Burberrys Worldwide.
“I am very disappointed,” said Philip Miller, Saks chairman and chief executive officer. “She’s a consummate professional and a great leader who enjoyed the respect and admiration of everybody in this organization.”
But he added, “We do have a very strong management team” and said the fall and Christmas seasons are “totally put to bed.”
“All the buying, all marketing plans are in place,” Miller said. “The store plans are in place. She’s leaving at a time where we’re just beginning the buying for the spring season.”
Bravo, whose relationship with Miller has reportedly been marked by conflicts at various times, told WWD she expects the new job to give her “more breathing space.”
She will join Burberrys on Oct. 6 and will report to Lord David Wolfson, chairman of the London-based parent company, The Great Universal Stores. She succeeds Stanley Peacock, who turns 65 this month, and who has spent 40 years with the corporation.
The departure represents a huge blow to Saks, which is in a crucial stage of a national expansion and struggling to be more competitive with Neiman Marcus and Bergdorf Goodman, its primary rivals. It is also struggling with a depressed stock price. Traded on the New York Stock Exchange, the issue closed Thursday at 23 5/8, up 13/16, but the news was released after the market closed. Its 52-week high was 41 1/4.
Yet Saks has been boldly opening stores and enlarging units right in the heart of Neiman’s territory, Houston and Beverly Hills, for example. And the 46-year-old Bravo has been the store’s real weapon in the battle for the luxury market. She joined Saks as president in September 1992, in charge of merchandising and marketing, after the parent Investcorp decided to lift the Saks profile and take it public last year.
Since then, she’s beefed up the merchandise at critical locations — the “A” stores — by striking deals with designers for getting exclusives in some markets. Such labels as Prada, Jil Sander, Issey Miyake, Jean Paul Gaultier and Zoran, once monopolized by Neiman’s and Barneys New York, can now be found at some Saks units.
“It’s a big shock,” said Herb Gallen, chairman of Ellen Tracy, which does more volume at Saks than any other store. “Saks is going to miss the best person they could possibly have. She brought everything — fashion, honesty and wonderful personal relationships with people in the business.”
Another source said, “She may not be a visionary, but she’s a spectacular negotiator and she’s good with the numbers. She’s relentless. Remember, she grew up in the cosmetics industry, where getting the lines is everything.”
“Her departure is potentially a major negative for the company,” said Robert Buchanan, retail analyst at NatWest Securities, who is downgrading the stock to “underperform” from “hold,” based on Bravo’s leaving. “Rose Marie was primarily responsible for the resource lineup you see today in the stores. With her leaving, a lot of questions have to be asked about merchandising moving forward.”
Saks answered some of those questions on Thursday, stating that with Bravo’s exit, Philip Miller, chairman and chief executive, will have direct responsibilities for merchandising and marketing activities, on top of supervising other selling and store operation activities.
In addition, two key Saks officials have been promoted. Stephen Bock, formerly senior vice president and general merchandise manager for designer apparel, cosmetics and fragrances, has been named executive vice president of merchandising. Sheri Wilson-Gray, senior vice president of marketing, has been named executive vice president of marketing. There are no plans to name a new president.
Described as a workaholic, Bravo is credited with positioning Saks as a major fragrance launch store. Some of its more flamboyant introductions in cosmetics were Casmir, L’Eau d’Issey and Gio by Giorgio Armani. In fashion, Saks has staked a claim for various high-profile bridge launches, including Isaac by Isaac Mizrahi and Bill Blass USA. Saks will launch Jil Sander’s new fragrance, Jil, at 50 doors on Sept. 17 and sell it exclusively for about four months, before it rolls out to Barneys, Bergdorf’s and Neiman’s.
“Saks is a very strong house for launching new brands, especially in cosmetics,” Sander recently said. “We have a very good relationship with Ms. Bravo.”
Bravo’s latest project has been among her most intensive: readying the 210,000-square-foot Houston store for its opening next Thursday in the Galleria. Saks’ second-largest store, it reportedly cost at least $50 million to build. Only the Fifth Avenue flagship is bigger. The Galleria also houses a $115 million Neiman’s branch, which is among the chain’s top three in volume.
Eighteen leading designers, including Isaac Mizrahi and Bill Blass, are expected to attend the opening of the Houston store, which is considered a prototype for future stores and expansions. But without the presence of Bravo, the party won’t have as much sparkle.
Reportedly, there were several factors behind Bravo’s decision to leave her post at Saks, one of the most visible and influential in the fashion community, for a job with far less exposure. Among them: an opportunity to be the sole commander of an operation, some differences with Saks management, and striking a rich deal with Burberrys.
Robert Kerson, chairman of Levy-Kerson, a headhunting firm, handled the search. He declined to comment.
Bravo would not comment on her contract terms with Burberrys, but said: “I been in retail for 26 years. I’ve loved it, and the last five years at Saks has been a highlight, working with Phil and a great team, but I felt ready for a new challenge. I’m intrigued by the idea of running a business and a worldwide global brand, and being involved in retail, wholesale and licensing. I think it will be a welcome change, spending more time on strategic and conceptual issues as opposed to being visible at shows and a figurehead. There may be a little more breathing space.”
Since Bravo joined Saks, there have been rumors that her relationship with Miller has at times been uneasy. Although it was Miller who recruited Bravo, she reportedly had to negotiate hard for the president’s position.
Any lesser title would have been unacceptable to Bravo, who prior to joining Saks, was chairman and ceo of the former I. Magnin chain for five years. Before I. Magnin, she was a general merchandise manager at Macy’s East. She started her career at Abraham & Straus in 1971, joined Macy’s in 1974, and rose through the buying and merchandising ranks, primarily in cosmetics and fragrances.
Many consider Bravo’s appointment to Saks as one of Miller’s best decisions, and the two have presented a posture, at least publicly, of working well together. Responding to rumors that there were some disagreements early on about her role in the organization, Bravo replied, “There were none at all. From the minute I joined, Philip was very clear with what he wanted to accomplish.”
According to Miller, “Rose Marie and I were very compatible. We were first-class partners. In every partnership or marriage, there’s never 100 percent unanimity. There have never been any significant differences about strategy and direction.”
However, there have been recent rumors of differences on certain strategies. Among them, bidding for Barneys New York and the Off-Fifth outlets. Miller wanted Saks to buy Barneys, and the company put in a bid. But when the Saks stock nosedived after disappointing results, the deal was killed.
Asked about those reports, Bravo said, “My whole focus has been on the core business, the main flagship stores and the merchandising and marketing. It’s really what I love. I have not really been involved in some of the other strategies.”
Bravo has also been less enthusiastic about Saks’ massive rollout of Off-Fifth outlets, because of the potential to diminish the tony image of Saks. The company says the outlets have been highly profitable. Overall, Saks went into the black last year after several money-losing years, but returned to red ink last quarter, as business slumped.
Bravo will be based in New York and London. While the Burberrys name still has cachet, she is expected to upgrade the merchandise and broaden its appeal, particularly in the U.S., where the company does not have a major presence and is still widely regarded as primarily a conservative label for raincoats.
Burberrys is owned by the English retail and mail-order group Great Universal Stores, which is undergoing a revamp under new chairman Lord Woolfson of Marylebone, who took over last year.
Woolfson has been reviewing the group’s operations, many of which have outdated images. These include The Scotch House, its mail-order business in the U.K., and Burberrys. There was speculation when Woolfson took over that he might spin off Burberrys or even sell it.
Burberrys has lagged behind the growth of such other luxury brands as Gucci and Prada, and analysts believe it is significantly underdeveloped.
Late last year, it opened the first freestanding shop for its secondary line, Thomas Burberry, in London, and plans to wholesale it worldwide and open further freestanding stores in major cities. The line is aimed at a younger customer, and Burberrys’ goal is to build it to 8 percent of its overall volume within five years.
For fall, for the first time in its 141-year history, Burberrys — a company that built its name on men’s trenchcoats and its signature tan plaid — expects to see more sales from women’s wear than men’s, propelled partly by a new line of wool coats and some skiwear pieces.
This year, Burberrys is projecting an overall percentage growth at retail in the high teens and for its wholesale division, a rise of around 30 percent. Sources estimated volume would reach 268 million pounds, or about $450 million worldwide.
As of last spring, Burberry had 16 stores in the U.S., including two in Hawaii and a flagship on 57th Street here. The company is negotiating for space in Las Vegas for a spring opening and is looking to enter Toronto in fall 1998.
Burberrys has 44 international stores in addition to its U.S. sites.
This year, it launched a fragrance brand in separate men’s and women’s forms for the second time in two years. They were rolled out to most European countries over the last six months and will be introduced in the U.S. next year.