Ralph Lauren (RL) Stock Gains After CEO Steps Down

30 Sep 2015 | Author: | No comments yet »

Ahead of the Bell: Gap down premarket as Old Navy exec exits.

Ralph Lauren the iconic designer who defined American sportswear is stepping down as chief executive officer and has named Stefan Larsson as a replacement, a position.NEW YORK (AP) — Gap appears to be heading toward three year lows, its stock down 7 percent before the opening bell, after one of its most talented executives was named to the top job at Ralph Lauren. Ralph Lauren’s decision to step down as CEO—which Lauren stressed is not a step towards retirement—was preceded by the company’s recent financial struggles. Earnings have been squeezed by the impact of the strong dollar and intense competition in the luxury retail space, with Ralph Lauren’s share price falling 44% this year at the time of this writing.

Lauren also held the unique role of both running a business and providing the creative inspiration and vision after his “partner” of sorts, former chief operating officer and president Roger Farah, retired a few years ago. Lauren told WWD, “This is important to say: There is no toe in the water…I won’t be coming in two days a week, ” wanting to make clear that he is not retiring but only relieving part of his duties to Larsson. Stefan Larsson is in some ways a surprising choice to succeed Lauren as the head of his fashion empire, although his past business savvy may have helped him in the decision process. He is credited with revitalizing the Old Navy brand with an operating model that was swift at identifying trends and responding to popular items in stores. Cantor Fitzgerald’s Laura Champine also sees the departure as a blow to Gap, saying Larsson was the retailer’s strongest leader and a top candidate to lead the company given his previous retail experience with H&M and his relatively young age.

David Lauren, Ralph’s son and board member and executive vice president said according to WWD, “I’m looking forward to working with Larsson whose commitment and passion to build great brands will be invaluable as we move into the future. Although he has stepped down as CEO, he will remain as executive chairman and chief creative officer. “When they start designing things I can’t understand, I’ll quit.

Last year the company launched Polo Ralph Lauren for women which is a younger, hipper take on the RL lifestyle brand, opening a flagship on Fifth Avenue complete with a café’ which serves Ralph Lauren’s own brand of coffee. Laurent and move to open a private members club in Milan suggest that Ralph Lauren is looking to grow its luxury business, Larsson’s hire indicates the company may have other plans. He’s unique as a man, a man who’s capable of building businesses and growing companies, but at the same time he’s sensitive to people’s feelings.” Wow, how crazy and unexpected is this news?

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