WOOLF JOINS CACHE AS CHAIRMAN
Byline: Arnold J. Karr
NEW YORK — Brian Woolf has become Unlimited.
Seeking to strengthen its merchandising performance, Cache Tuesday named Woolf, Limited Stores’ head merchant, to the posts of chairman and chief executive officer with responsibility for the company’s 187 Cache and 24 Lillie Rubin stores.
Additionally, the company promoted Thomas Reinckens, currently its executive vice president and chief financial officer, to the new post of president and chief operating officer and noted that it expects to report a loss for the third quarter ended Sept. 30.
Woolf, who starts at Cache today, succeeds Andrew Saul as chairman. Saul, whose family owns 75.6 percent of Cache’s outstanding shares, didn’t hold the post of ceo but had effectively served in that capacity. Reinckens; Mae Soo Hoo, executive vice president and general merchandise manager; and Roy Smith, executive vice president and director of store operations, had reported directly to Saul and will now report to Woolf.
Woolf joined Limited Stores as executive vice president of merchandising in April 1999 and generally has been credited with spearheading improvements — although not a comprehensive turnaround — of Limited’s flagship division. Although margins and operating profits rose in the second quarter, the division’s same-store sales were flat for the quarter, down 6 percent in August and up 8 percent in September.
But Woolf has had a history of being attracted to turnaround situations. The challenge of reinventing Cache’s merchandising profile should provide another opportunity to demonstrate his abilities in reversing the fortunes of a retailer which, if not exactly troubled, has been unable to pull away from the specialty store pack.
Prior to joining Limited last year, Woolf was senior vice president and general merchandise manager of Caldor Corp., the regional discount chain which went out of business in 1999. He joined Caldor in 1996 after spending a year at Marshalls — later merged into TJX Cos. — as vice president and gmm of ready-to-wear. A veteran of numerous merchandising positions with Federated and — in the days prior to its consolidation into Federated — Macy’s, he began his career at Abraham & Straus.
Reinckens has been with Cache for 13 years, joining as controller in 1987 and being promoted to cfo two years later. He was promoted to executive vice president in 1995. Earlier in his career, he was associated with Emory Air Freight and Brooks Fashion Stores.
In a statement, Saul, who continues as a director of the company, said “the timing was right to add an executive with the extensive merchandising experience and leadership qualities Brian Woolf has. I believe the new executive team led by Brian and Tom will ultimately allow Cache to reach its true potential.”
If so, it won’t be realized in their first months at their new posts. The company said Tuesday that it expects to report a loss in the third quarter “greater than the 8-cents-per-share third-quarter loss in 1999.” Cache, which had earnings of 11 cents a share for the first half of the year, expects nine-month results to be approximately break-even versus a 16-cents-a-share profit in 1999. Unlike most retailers with fiscal years ending at the end of January, Cache’s conforms to the calendar year.
After briefly hitting a 52-week low of $2.50 Tuesday, Cache’s shares finished the day at $2.72, down 3 cents, in Nasdaq trading.
The company continues to expect a profitable fourth quarter, traditionally its strongest. Last year, 27 cents of the company’s full-year profits of 43 cents a share came during the final quarter of the year. Cache in 1999 earned $4 million, a 1.9 percent increase from the prior year, on sales of $161.4 million, a 9.9 percent increase.
In August, Cache reported that its second-quarter earnings fell 41.2 percent to $1.3 million, or 14 cents a share, while sales gained 10.7 percent overall, to $84.7 million, and 1.4 percent on a comparable-store basis.
In an interview with WWD, Reinckens noted that “third-quarter difficulties like these have been common for us the last few years, and we hope that Brian’s expertise can help to make a difference. What this move signifies is first that Andy Saul decided it was time to step down from day-to-day operations, and secondly that we believe it’s merchandising expertise that will allow us to start recording better returns on our sales and improving shareholder value.”
He said much of what needed to be done has already been started. “We’re sourcing more on our own, and getting better initial markup on those goods we source,” Reinckens pointed out, “but we still have to improve the merchandising formula more and we believe Brian’s the person who can bring all the elements together, including the seasonality factor.”
Reinckens noted that Cache has been profitable for ten years, has increased from about 29 stores to more 200 in 14 years, registered sales in excess of $400 per square foot and remained debt free. “But we haven’t earned enough on our sales to move shareholder value up,” he said. “The pieces are there, but they need to be fine-tuned.”