Ralph Lauren hires Old Navy exec to replace him as CEO

30 Sep 2015 | Author: | No comments yet »

Ralph Lauren steps down as CEO after 48 years.

The New York-based company announced on Tuesday that Stefan Larsson, who has been the global president of Gap’s low-price Old Navy chain for three years, will succeed him.

The multi-billion dollar American fashion designer Ralph Lauren of the Ralph Lauren Corporation announced that he will be stepping down as CEO of his brand passing the role on to Stefan Larsson starting November of this year. The change will be effective in November, and Larsson will report to Lauren who will continue to drive the company’s vision and strategy as executive chairman and chief creative officer. Prior to his tenure at Old Navy, Larsson was part of an executive team at Swedish cheap chic fashion chain H&M for 15 years that increased annual revenue from $3 billion (Dh11 billion) to $17 billion. During that time, H&M’s operations grew to 44 countries from 12. “My job is to think always about the future of our company and how to move it forward,” Ralph Lauren said in a statement. “Stefan Larsson is exceptionally talented, and he will bring our company a fresh and exciting global perspective.” Ralph Lauren also announced that Jackwyn Nemerov, president and chief operating officer, will retire in November, at which time she will become an adviser to the company.

Odeon Capital analyst Rick Snyder said the company had grown to a size where it needed more “systems and controls.” The change in CEO “is just a natural progression,” Snyder said. The news comes as Ralph Lauren, which generated sales of $7.5 billion in the latest fiscal year March 28, has been expanding its luxury business while beefing up its online presence. Milton Pedraza, a fashion industry analyst at the Luxury Institute, said Larsson’s appointment follows a trend of luxury brands hiring leaders from mass-market companies in recent months.

Lauren’s fashion empire includes some 25 brands including Polo, Club Monaco and Denim & Supply, and the company makes clothing, accessories, furniture, home decor items and footwear under its labels. Lauren, who started the company 48 years ago selling ties, has built a vast empire that includes women’s, men’s and children’s clothing, home decor, accessories and now restaurants. Larsson, a Swede who before joining Gap was global head of sales at Hennes & Mauritz, brings experience of managing a fast fashion business with a supply chains considered to be among the most efficient within the apparel industry. “If he comes from a place like H&M, he understands global supply chains and that’s one of the things that Ralph Lauren is trying to implement right now,” Snyder said. “It’s going to be very positive for them.” Despite the aura of Anglo-Saxon elitism around his company, Lauren was born Ralph Lifshitz in the Bronx in 1939. Larsson’s response to this was: “I am thrilled to have the opportunity to work directly and collaboratively with a fashion giant like Ralph Lauren.

Lauren’s designs drew inspiration from elite and exotic realms including East Coast prepsters, the Wild West, colonists on African safari and czarist Russia. I believe the company has tremendous potential to continue expanding in the global marketplace as it broadens its appeal to all consumers.” It is clear that the decision was taken to boost the growth of the company. His bright colors and bold clothing became staples for some New York gangs, and rappers such as Kanye West and Lil Wayne have mentioned Lauren and his designs in their rhymes. During the interview, Lauren and Larsson said they are looking for more growth opportunities in China and Europe as well as pushing for more growth in the e-commerce business.

Meanwhile, Gap Inc., based in San Francisco, said Larsson will step down on October 2nd and Jill Stanton would lead Old Navy in the interim while it searches for a permanent replacement. Gap noted in a release that Stanton is a “proven industry veteran” with more than 25 years retail experience, including almost 14 years as vice president and general manager of global apparel at Nike. Ralph Lauren’s shares slipped 83 cents to close at $104.05, but rose nearly 4%, or $4.07 to $108.12 in after-hours trading when the news was announced.

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