CHARRON NAMED CEO AT CLAIBORNE, CHAZEN REMAINS AS CHAIRMAN
Byline: Anne D’Innocenzio
NEW YORK — Jerome A. Chazen, head of Liz Claiborne Inc. and one of the architects of the firm’s remarkable growth in the Eighties, is stepping down as chief executive officer but will remain chairman, the company said Tuesday.
The new ceo will be Paul R. Charron, who also adds the title of president. Charron, 52, joined Claiborne last April as vice chairman and chief operating officer and began a total restructuring of the troubled $2.2 billion apparel giant.
The moves, which were not unexpected, are scheduled to become effective May 11 at the company’s annual shareholders’ meeting.
The company has no immediate plans to fill the chief operating officer post. The title of president was held by Harvey L. Falk, also a vice chairman, who retired Jan. 1 after 13 years with the firm.
Reports of an impending change at the top appeared in these columns on Dec. 15.
“Nobody lives forever, and what we have to do is prepare the company to move forward,” said Chazen, in an interview Tuesday.
Although he said he will still have day-to-day responsibilities, his emphasis will be on developing Claiborne’s international business and retail concept stores. These projects include franchise stores in the Far East and the Middle East as well as expanding the company’s store distribution in Western Europe and Switzerland, he said.
He added that he also wants to develop Claiborne’s retail stores as merchandising laboratories for product testing.
“Retirement is not in my vocabulary,” the 67-year-old Chazen said. “The company is right now in the midst of a whole restructuring, and Paul and I are working together on that.”
“There is plenty of work for us, but we just want to take away all of this uncertainty about a succession plan,” said Charron. “We are going to be collaborators. We are going to be attacking a number of problems.”
He declined to elaborate.
The change could signal a new era for Liz Claiborne, whose core $1.1 billion sportswear business has been ailing over the past few years. Chazen’s expertise had been in developing the company’s department store base, which has been steadily shrinking.
Charron, whose previous experience was with Procter & Gamble and VF Corp., is expected to use his experience in the moderate and mass distribution channels to develop Claiborne’s moderate price brands: Russ, Crazy Horse and Villager. The three brands, which have been floundering, were bought in 1992 from Russ Togs, then liquidating in bankruptcy.
Chazen has been with the firm since 1977, the year after it was founded by Elisabeth Claiborne Ortenberg — known professionally as Liz Claiborne — her husband, Arthur Ortenberg, and Leonard Boxer. Boxer left the company in 1985; the Ortenbergs retired in 1989.
Industry analysts praise Chazen, who has been chairman since 1989, for developing strong relationships with the stores and for his marketing acumen.
Prior to joining Claiborne, Chazen had worked as a securities analyst on Wall Street and spent the following 16 years in retailing.
“Chazen has been a strong leader, but I think Charron could revolutionize the company, taking the firm from one that talks about changes to one that implements the changes,” said Todd Slater, an analyst at UBS Securities.
But, he added, “In order to be successful, he needs to move away from the firm’s dictatorial style to a more user-friendly, product-driven environment.”
So far, industry observers have complimented Charron’s restructuring efforts, moves that have included:
Splintering its three better-price sportswear lines — Lizsport, Lizwear and Collection — and putting them under three different presidents. They each report to Charron. They had previously been headed by one president.
Consolidating its three moderate-price brands — Russ, Villager and Crazy Horse — into one unit. The new president of those units, who has yet to be named, will also report to Charron.
Phasing out its money-losing First Issue retail chain, which was launched in 1988, and converting some of them to Liz Claiborne and Elisabeth stores, with the remainder to be sold.
In the latest financial figures available, Claiborne reported third-quarter earnings for the period ended Oct. 1 rose 12.1 percent to $42.9 million, while sales slipped 0.8 percent to $616.8 million. The quarterly earnings were the first profit increase since the second quarter of 1992.
Given the tough economic environment, department stores’ aggressive push in private label, and retail consolidation, industry sources said Claiborne needs more than just a streamliner: it needs a visionary who will steward the company and revive its merchandise.
“Charron is a great surgeon, and has the ability to excise tumors from flesh, but is he a therapist? Can he revive the patient? That is the key question,” said Harry Bernard, executive vice president of Colton Bernard Inc., a San Francisco apparel industry consulting firm.
Charron’s task — to revive Claiborne, which has been losing market share over the past few years — is a challenging one. When Claiborne was founded in 1976, there was very little competition in the race to put working women in updated fashions.
Today, it’s a different story. Liz Claiborne now has to contend with department stores, which over the past two years have aggressively developed fashion-forward casual and career private label; specialty stores, like Banana Republic, which last fall made a push into dressy career clothes, and other sportswear competitors, particularly Jones Apparel Group, which has taken direct aim at Claiborne’s casual sportswear business. Another vital question, say industry observers, is this one: In the face of retail consolidation, how can a $2.2 billion fashion company, whose sportswear business already occupies a huge amount of real estate at department stores, grow any further?
“We are going to be attacking different problems,” said Charron. “We are enhancing our capabilities and trying to gain competitive advantage. We want to be more responsive to our customers.”
Charron, who spent six years at VF Corp., was a group vice president until March 1993, when he was promoted to executive vice president. He had responsibilities for sportswear, including the Marithé & Francois Girbaud line and the Jantzen division, as well as the domestic and overseas intimate apparel businesses.
Prior to joining VF, Charron was president and chief operating officer at Brown & Bigelow, a specialty advertising firm in St. Paul, Minn. Earlier, he was senior vice president of sales and marketing at Cannon Mills Co. and worked in marketing management positions at General Foods Corp.