By Ray A. Smith And Suzanne Kapner
Ralph Lauren Corp. said it has hired Stefan Larsson, the global
president of Gap Inc.'s Old Navy division, as its chief executive,
putting in motion a succession plan for one of fashion's biggest
companies.
Ralph Lauren, who will turn 76 on Oct. 14, has been the chief
executive and lead designer of the company since he founded it 48
years ago and built it into a global luxury brand. While handing
over operational duties, Mr. Lauren will remain at his company as
executive chairman and chief creative officer.
In an interview Tuesday at his Madison Avenue office, Mr. Lauren
stressed that the change wasn't about him stepping aside, but
rather about bringing on a partner to help take the company to the
next level.
"The company has to change," Mr. Lauren said. "It's a public
company and we have a responsibility to have the right
leadership."
Mr. Larsson, who is 41 years old, had been in his role at Old
Navy since 2012 and is credited with helping revive sales at the
casual apparel brand. Previously, he spent 15 years at fast fashion
retailer H&M. He will join Ralph Lauren and its board in
November.
The move to reach outside for a CEO shows how Ralph Lauren,
which had $7.6 billion in sales in its latest fiscal year, is
attempting to shore up its business after sales and profits have
sagged this year. The company's share price has fallen about 44%
this year through Tuesday's close, erasing nearly $5 billion in
market value.
Mr. Lauren said he had been thinking about bringing on new
management for several years. He was introduced to Mr. Larsson
through an executive recruiter and the two met face to face for the
first time "a while ago" over dinner at Sette Mezzo, an Italian
restaurant in New York City.
"We connected in five minutes," Mr. Larsson said. "Ralph
surprised me by being so focused on growth."
The appointment marks the latest changing of the guard at a big
American fashion house. Donna Karan stepped down from the company
she founded earlier this year. Oscar de la Renta passed the baton
to designer Peter Copping in October 2014 before he died. In those
cases, the CEO role was held by an executive.
Mr. Lauren said he isn't going anywhere. "I'm excited about my
business and I'm not leaving," he said. "I'm taking on a
partner."
Mr. Lauren's son, David, who is an executive vice president and
was considered by some investors as a potential CEO successor, said
in a news release: "I'm excited to welcome Stefan to our team and I
look forward to working closely with him."
Ralph Lauren also said Tuesday that its No. 2 executive,
President and Chief Operating Officer Jackwyn Nemerov, will retire
in November. She will become an adviser to the company.
Ms. Nemerov, who assumed the president's role in 2013 after
spending about a decade with the company, was in the process of
restructuring the company around global brands to make it more
nimble, but results have been disappointing. She has faced a host
of recent challenges, including the strong dollar, which has made
Ralph Lauren's products more expensive to overseas customers and
tourists visiting the U.S.
In February, the company reported an unexpected slowdown in
traffic at its retail stores, and heavy discounting by rivals
dented sales. In August, the company said quarterly revenue fell
5.3% to $1.62 billion as sales excluding newly opened or closed
stores fell 8%.
Mr. Lauren founded his company in 1967 beginning with a line of
neckties under the Polo name, and in the years since, it has grown
into an empire encompassing men's, women's and children's clothing
and home furnishings.
Its advertising promoted an affluent and tasteful lifestyle,
filled with wholesome-looking sophisticates, preppy Ivy League
staples and looks inspired by the American West, Old Hollywood,
safari or Navajo. More recently, the company has been putting more
emphasis on the luxury side of its business and international
expansion.
Mr. Lauren said Tuesday he could foresee entering new lines of
business beyond the current mainstays of apparel, accessories and
home goods, as it has with the recent opening of the Polo Bar, a
restaurant in midtown Manhattan.
"I felt [Mr. Larsson] needed to be CEO to do all the things that
need to be done," Mr. Lauren said.
Mr. Larsson will leave his role at Old Navy on Oct. 2. He will
be replaced by Jill Stanton, executive vice president of global
product at Old Navy, who will lead the division in the interim. She
will report to Gap Inc. Chief Executive Officer Art Peck. A search
for a new global brand president is already under way, Gap
said.
Write to Ray A. Smith at ray.smith@wsj.com and Suzanne Kapner at
Suzanne.Kapner@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 29, 2015 16:46 ET (20:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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