WAL-MART TAPS JACKSON TO HEAD UP WEB SITE
Byline: David Moin / Vicki M. Young
NEW YORK — Intent on raising the standards of its apparel offerings online, Wal-Mart has hired one of the nation’s top specialty retailers, Banana Republic’s Jeanne Jackson, as chief executive officer of its Wal-Mart.com subsidiary.
While a coup for Wal-Mart, Jackson’s move is a blow to Gap Inc., parent of Banana Republic. As Banana’s ceo since 1996, she successfully piloted the expansion of the upscale chain, taking the 300-plus unit chain to many prime locations, including Rockefeller Center and the Forum Shops at Caesar’s in Las Vegas. The 48-year-old Jackson for the past two years has also been running Gap Inc. Direct, which includes the company’s online businesses for Gap, Banana Republic and Old Navy, as well as Banana Republic Catalog.
Shopping on the Internet continues to grow rapidly, but Wal-Mart has not made much impact online, and this year some experts have tempered their estimates on its potential as a consumer selling channel and for producing profits. Still, Internet startups are racing to grab top talent. Recently, Stephen Elkin left his post as Bergdorf Goodman ceo to start Fashion500, a site for luxury goods which is under development. Also, James Nordstrom, a Nordstrom co-president, left his family’s chain to get involved in Internet startups.
Jackson’s move apparently caught Gap off-guard. The company said a search for a successor has begun. In the interim, an office of the presidency has been set up to cover hers responsibilities.
It is expected that Wal-Mart paid dearly to get Jackson. Top Gap executives are heavily compensated through stock, and it’s rare when one jumps ship. As Janet Joseph Kloppenburg, analyst at Robertson Stephens, said, “It’s a great opportunity for her. As exciting as Banana Republic was, Jeanne now has the ability to run her own business and [maybe] take the company public. With the stock options and package offered, Wal-Mart.com was probably an offer she couldn’t refuse.”
“What she’ll bring to Wal-Mart is a taste level and apparel merchandising skills that will build the Web site,” added Robert Kerson, managing director, global retail, Korn Ferry. “She’s smart, a good business builder and a good marketer. So much of this Internet space is grabbing top talent.”
Aside from Gap, Jackson has worked at Saks Fifth Avenue, Victoria’s Secret, the Walt Disney Co. and Federated Department Stores. She will join Wal-Mart.com in the next few weeks, and report to the board which includes Rob Walton, chairman of Wal-Mart Stores, Lee Scott, president and ceo of Wal-Mart Stores, and James Breyer, managing partner of Accel Partners. Jackson was also named to the board.
Wal-Mart.com was established earlier this year by Wal-Mart Stores and Accel Partners, a venture capital firm in California’s Silicon Valley, to accelerate the development of Wal-Mart’s Internet programs. It’s an independent company, with its own board and management, though Wal-Mart Stores has a majority interest and majority representation on the board.
“Jeanne is an outstanding retail and management talent who has developed successful brands and programs in traditional and online retail channels,” Scott said in a statement. “She represents a great addition to the Wal-Mart family and a great fit in our culture.” Jackson said in a statement: “There is a revolution going on in the way that people shop and communicate. The opportunity to play a significant role in applying the Wal-Mart brand to this new medium is simply once-in-a-lifetime.”
At Banana Republic, three senior executives will run the business through a newly created office of the president, reporting to Millard Drexler, Gap chairman and ceo. Those executives are Jerome Jessup, executive vice president, product design and development; Gary Muto, executive vice president of merchandising; and Amy Schoening, senior vice president of marketing.
Heading the company’s online businesses will be Ron Beegle, who was promoted to executive vice president, Gap Inc. Direct, reporting to Drexler. Beegle, who has been with the company for four years, was senior vice president of finance, administration and operations, for Banana Republic and Gap Inc. Direct. He has been leading day-to-day operations at Gap Inc. Direct for the past year.
Also, Mitch Rhodes was named to the new post of vice president, marketing, Gap Inc. Direct, reporting to Beegle. He was vice president of marketing for Old Navy.
Analysts suggested it is most probable Banana will get an insider to succeed Jackson. “There are at least three contenders for the presidency at Banana Republic, and there may be others within the Gap ranks,” said Todd Slater at Lazard Freres, noting “good depth” of talent at Gap Inc.
Kurt Barnard, retail consultant, said, “Wal-Mart has openly acknowledged that it is extremely unhappy about its Web site, which is nothing to write home about. The new site — launched last week — was supposed to end all Web sites, but is a disappointment to the company and others hoping to be able to place orders.”