deep dive: us retail—store closure and management · pdf fileclosure and management ......
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
KeyTakeaways
1) Among the major US retailers that we track, so far this year,eight have announced store closures and another six haveannounced management changes.
2) Storeclosureannouncementsare concentrated among thedepartment stores and specialty retailers. Those facingbankruptcy proceedings—Wet Seal, American Apparel andThe Limited—plan to close their entire store network.Macy’s plans to close 9% of its total store base, Sears 6%,Kmart 13%, BCBG 21%. JCPenney has plans to cut stores inthe near future.
3) Managementchanges: Since the start of 2017, six majorretailers have announced management changes, includingRalph Lauren, Tiffany & Co., Abercrombie & Fitch, Barneys,Givenchy and Coach.
4) Thesharedrationalebehindthestoreclosuresincludereconfiguringthestorenetworkduetotheshifttoonlineshopping,stemminglossesfromunprofitablestoresandreallocatingresourcestofocusareas.Managementchangesannouncedwerejustifiedbydisappointingfinancialperformance(Tiffany&Co.),conflictingviewswithfounders(RalphLauren)andplannedsuccession(Barneys).
Deep Dive:
US Retail—Store Closure and
Management Change Tracker
Deborah Weinswig
Managing Director,
Fung Global Retail & Technology
US: 917.655.6790
HK: 852.6119.1779
CN: 86.186.1420.3016
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
ExecutiveSummarySincethestartof2017,severalmajorUSretailershaveannouncedstoreclosures,bankruptciesandmanagementchanges.
Inthisregularupdatereport,wetrackmajorannouncementsfromretailers,suchasstoreclosures,bankruptciesandmanagementchanges,whichwebelievecouldprovideinsightsintotheoverallhealthoftheretailindustry.
SummaryofMajorAnnouncements• Storeclosures:Eightmajorretailershaveannouncedstoreclosure
planssincethestartof2017.Macy’sisclosing9%ofitstotalstorebase,Sears6%,Kmart13%andBCBG21%.JCPenneyhaveplanstocutstoresinthenearfuture.WetSeal,AmericanApparelandTheLimitedareclosingtheirentirestorenetwork.
• Bankruptcies:WetSeal,AmericanApparelandTheLimitedarefacingbankruptcyproceedings.
• Managementchanges:Since the start of 2017, six major retailershave announced management changes, including Ralph Lauren,Tiffany & Co., Abercrombie & Fitch, Barneys, Givenchy and Coach.
ConclusionsDrawnfromourProprietaryDatabase• Storeclosures:Mostoftheretailersthatareclosingstoresfallwithin
thedepartmentstoreandspecialtyretailcategory.Thesharedrationalebehindthedecisionstoclosethestoresareprimarily:1)toreconfigurethestorenetworkduetotheshifttoonlineshopping;2)tostemlossesfromunprofitablestores;and3)toreallocateresourcestofocusareas.
• Managementchanges:Thesechangesareconcentratedattheluxuryandspecialtyretailers.Therationalebehindthemanagementchangesincludesdisappointingfinancialperformance(Tiffany),conflictingviewswithfounders(RalphLauren)andplannedsuccession(Barneys).
Wewillcontinuetomonitortheretailindustryformajorannouncementsandprovidetimelyupdatesforourreaders.
Figure1.OpeningsandClosingsofPrivateEstablishments,USRetailIndustry
Source:USBureauofLaborStatistics
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Table1:YTD2017AnnouncedStoreClosuresAnnouncementDate Segment Retailer
StoreClosings
%ofTotalStoreBase Status
ReasonsForStoreClosure Long-TermPlan
UseofFreed-UpCapital FinancialImpact
Jan2017 Departmentstores
JCPenney TBC TBC Underreview
Resourceallocation,competitionfrome-commerce
Underreview.Estimated300(or30%)storesinthenexttwoyears(Cowen&Coestimates)
Freeupcashtoinvestine-commercedevelopmentanditsbeststores
TBC
BeginningJan2017
Apparel WetSeal 171 100% Bankruptcyproceedingsinprogress
Poorbusinessperformanceledtobankruptcy,sluggishmalltraffic,changingconsumerpreferencesandtherisingpopularityofonlineshopping
Underliquidation,asunabletoacquirefreshcapitalorbuyers
NA WetSeallistedassetsof$10–50millionandliabilitiesof$50–100million
Jan18,2017 Apparel BCBG 120 21% Inprogress.Thelocationsthatwillbeclosedareholdingliquidationsales
Facingfinancialdistressandstrugglingtoadapttotheshifttodigitalcommerce
Underreview.BCBGispreparingforapossiblebankruptcyfiling(MinneapolisStarTribune)
Easethedebtburdenandupgradetheonlineplatform
TBC
Jan4,2017 Departmentstores
Macy’s 68 9% Completebymid-2017
Resourceallocationandcostreduction
~100closingsannouncedinAugust2016
Invest$250million(outof$500millionsavings)intogrowinge-commerce,Bluemercury,Macy’sBackstageandChina
Annualexpensesavingsof~$550million,reducesalesby~$575million
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
AnnouncementDate Segment Retailer
StoreClosings
%ofTotalStoreBase Status
ReasonsForStoreClosure Long-TermPlan
UseofFreed-UpCapital FinancialImpact
Jan5,2017 Departmentstores
SearsandKmart
42Searsand108Kmartstores
6%forSearsand13%forKmart
Inprocess Closenon-profitablestores,disappointingholidayresults
IntegratedRetailstrategytotransformthecompany“fromastore-based,asset-intensivebusinessmodelintoamembership-focused,asset-lightbusinessmodel”
FocusonmoreprofitablestoresanditsShopYourWaymembershipplatform
TBC
Jan2017 Apparel AmericanApparel
110 100% Bankruptcyinprocess
Failedattemptatreorganizingafterfirstbankruptcyfilingin2015,decliningsales,hypersexualizedimagelostappealandhigh-interestdebt
NA NA AliquidationsaleofintellectualpropertyandotherassetsaresoldtoGildanActivewearIncfor$88million(storesarenotincluded)
Jan17,2017 Apparel TheLimited
250 100% Bankruptcyinprocess
Fallingmalltraffic,decliningpopularityinstyles,falteringmanagementteam
Currentlyevaluatingstrategicalternativesforitse-commercebusinessandintellectualproperty
NA Anaffiliateofprivate-equityfirmSycamorePartnersagreedtoprovidea$25.75millionstalkinghorsebidforthecompany’sintellectualproperty
Source:Variouscompanies’data/Bloomberg/FungGlobalRetailTechnology
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Table2:YTD2017AnnouncedManagementChangesDateAnnounced In/Out Company Name Title Profile Reason StatusJan4,2017 + Coach KevinG.Wills Chief
FinancialOfficer
KevinWillsjoinsCoachfromAlixPartnersLLP,aglobalbusinessadvisoryfirm,wherehehasservedasManagingDirectorandCFOsinceMarch2014andspecializedincorporateturnaround,capitalrestructuringandM&As.PriortoAlixPartners,heservedfor16yearsinvariousseniorleadershippositionsatSaks.
WillswillreplaceAndreaShawResnick,theinterimCFO.ResnickwillcontinueastheGlobalHeadofInvestorRelationsandCorporateCommunicationsforCoach.
EffectivenolaterthanMarch2017
Jan30,2017 + Abercrombie&Fitch
WillA.Smith ChiefMarketingOfficer
WillSmithjoinsAbercrombiefromCaleresInc.,whereheservedinseniormarketingrolesforthepastnineyears.HeworkedforiconiccompaniessuchasKraft,AtlanticRecords,andLizClaiborne,invariousbrandandmarketingrolespriortojoiningCaleresInc.
Smith’sintroductionaimstostrengthenAbercrombie’sconnectionwiththecustomersandtoenhancethepowerandclarityofthebrandidentities.
Effectiveimmediately
Feb1,2017 + Abercrombie&Fitch
FranHorowitz ChiefExecutiveOfficer
FranHorowitz,PresidentandChiefMerchandisingOfficer,ispromotedtoCEO.ShehasshownstrongleadershipintheturnaroundofHollisterandpreviouslyhadservedvariouspositionsatAnnTaylor,Loft,Express,Bloomingdale’s,BergdorfGoodman,BonwitTellerandSaksFifthAvenue.
ThepromotionofHorowitzendsatwo-yearperiodwhenthecompanywasrunbyanOfficeoftheChairmanthatincludedHorowitzandExecutiveChairmanArthurMartinez,whichwasestablishedafterthedepartureofthenCEOChristosAngelides.
Effectiveimmediately
Feb1,2017 + Abercrombie&Fitch
JoanneCrevoiserat
ChiefOperatingOfficer
JoanneCrevoiserat,ExecutiveVicePresidentandCFO,waspromotedtoCOOwhilecontinuinginhercurrentrole.PriortojoiningAbercrombie,sheservedinanumberofseniormanagementrolesatKohl’sInc.andseniorfinancepositionswithWal-MartStoresandMayDepartmentStores.
Effectiveimmediately
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DateAnnounced In/Out Company Name Title Profile Reason Status
Feb2,2017 + Barneys DaniellaVitale ChiefExecutiveOfficer
PriortoDaniellaVitale’spromotiontoCEO,sheservedastheCOOofBarneys,overseeingallwomen’smerchandising,businessdevelopment,digitalstrategyandstoreoperations.Previously,sheworkedatGucci,GiorgioArmaniandFerragamoUSA.
Thechangeisaplannedsuccession.VitalewasthedesignatedheirapparentofMarkLee,ExecutiveChairmanandformerlyCEOofBarneys.
Effectiveimmediately
Feb2,2017 - Barneys MarkLee ChiefExecutiveOfficer
MarkLeeservedasCEOofBarneysandwillnowassumetheroleofExecutiveChairman.
Effectiveimmediately
Feb2,2017 - Givenchy RiccardoTisci CreativeDirector
RiccardoTisciservedastheCreativeDirectorofGivenchyfor12yearsbeforedepartingandwasresponsiblefortransformingGivenchyintooneofLVMH’smostsuccessfulbrands.Herevivedthebrandandwasanearlyadopterofsocialmedia.
Thereasonforthedeparturewasnotgiven.Tisciattributedhisdeparturetopersonalreasons.TherehasbeenunconfirmedspeculationthathewillbejoiningVersace.
Givenchystatedthatasuccessorwillbeannouncedsoon.
Feb2,2017 - RalphLauren StefanLarsson
PresidentandChiefExecutiveOfficer
StefanLarssonhasservedasthePresidentandCEOofRalphLaurenforlessthantwoyears.Duringhistenure,hecutjobs,closedstores,improvedtheonlineexperienceandstreamlinedthesupplychain.PriortojoiningRalphLauren,Larsson’sbackgroundwasinbudgetapparel:heservedastheGlobalPresidentofOldNavyandH&M.
Therehasbeenaclashofviewsonhowtoevolvethecreativeandconsumer-facingpartsofthebusinessbetweenStefanLarssonandRalphLauren,thecompany’sExecutiveChairmanandChiefCreativeOfficer.
ThecompanyhascommencedasearchforanewCEO.Intheinterim,CFOJaneNeilsenwillleadthecompany.
Feb5,2017 - Tiffany&Co. FredericCumenal
ChiefExecutiveOfficer
FredericCumenalservedasCEOforTiffanyandhasheldseniorroleswhenheoversawthecompany’sglobalexpansionanddevelopmentofnewcollections.HeservedasPresidentandCEOofMoet&ChandonpriortojoiningTiffany.
Theboardisdisappointedwiththerecentfinancialperformanceandweakholidaysales
TiffanyhascommencedasearchforanewCEO.
Feb5,2017 + Tiffany&Co. MichaelJ.Kowalski
ChiefExecutiveOfficer(Interim)
MichaelKowalskiistheChairmanoftheBoardofDirectorsandpreviousCEOofTiffany.HewillserveastheinterimCEOwhilecontinuingtoserveasChairman.
ChairmanandpreviousCEOMichaelKowalskiwillserveasinterimCEO.
Source:Variouscompanies’data/Bloomberg/FungGlobalRetailTechnology
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February10,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
TableofContentsExecutiveSummary…………………………………………...…….…………………………….…..……………………………………………….2
StoreClosings……………………………….……………………………..…………………………………………….………………………………..8JCPenney..........................................................................................................................................8Macy’s..............................................................................................................................................8SearsandKmart...............................................................................................................................9BCBG...............................................................................................................................................10WetSeal.........................................................................................................................................10AmericanApparel...........................................................................................................................10TheLimited.....................................................................................................................................11
ManagementChanges………………..…………………………………………………….…..……………………………………..……..….…12RalphLauren...................................................................................................................................12Tiffany&Co....................................................................................................................................12Abercrombie&Fitch......................................................................................................................13Barneys...........................................................................................................................................14Givenchy.........................................................................................................................................15Coach..............................................................................................................................................15
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
StoreClosings
JCPenneyJCPenneyannouncedthatitisconsideringclosingstoresin2017.However,theexactnumbersareyettobeconfirmed,accordingtoCEOMarvinEllison.
• Reasonforstoreclosings:Aresourceallocationdecision.JCPenneywilldownsizecertainlocationsthatnolonger“meetbrandstandards.”Theannouncementisareversalfromthecompany’spaststrategyofavoidingmassstoresclosuresinordertominimizetheimpactfrome-commerce.
• Forecast:ItisestimatedJCPenneywillclosedownmorethan300,or30%ofitsstores,inthenexttwoyears,accordingtoestimatesfromCowenandCompany,afinancialserviceandresearchfirm.
• Capitaldeployment:Capitalthatisfreedfromstoreclosingswillbedeployedintoe-commerceinvestmentandmoreproductive stores.
Figure2.JCPenneyStoreCount
Source:Companydata/Cowen&Co,FungGlobalRetailTechnology
Macy’sMacy’sannouncedonJanuary4,2017,thatitwillclose68stores,or9%ofitstotalstorebase,bymid-2017.Thisroundofstoreclosingsispartofthecompany’splantoclose100storesoverthenextfewyears,announcedinAugust2016.
• Reasonforstoreclosings:Resourceallocationandcostreductionduetothecontinuingstructuralshifttoonlineshopping.AccordingtoCEOTerryLundgren,Macy’swill“closelocationsthatareunproductiveorarenolongerrobustshoppingdestinationsduetochangesinthelocalretailshoppinglandscape,aswellasmonetizinglocationswithhighlyvaluedrealestate.”
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
• Forecast:Macy’sestimatestheclosureswillgeneratesavingsof$550millionbeginningin2017,reducethisyear’ssalesby$575millionandtrim3,900offheadcount.
• Capitaldeployment:Capitalthatisfreedupfromthestoreclosureswillbefurtherinvestedinomnichannelcapabilities,customeranalyticsandmarketingstrategies.Macy’swillopennewstoresinAbuDhabiandKuwait,andexpandMacy’sBackstageandBluemercury.
SearsandKmartSearsannouncedonJanuary5,2017,thatitwillclose150stores,comprising108Kmartstoresand42SearsOutlets.TheannouncementcameonthesamedaySearsannouncedthesaleofCraftsmantoolbrandtoStanleyBlack&Decker.
• Reasonforstoreclosings:Tostemlosses:the150storessufferedanadjustedEBITDAlossofUS$60million.Thestoreclosureannouncementcameafterthecompanyreporteda12%–13%declineinsame-storesalesgrowth(SSSG)inthefirsttwomonthsof4Q16.
• Forecast:CreditratingfirmFitchRatingsforecaststhatSearsisindangerofdefaultin2017.
• Capitaldeployment:ThecompanywillfocusonmoreprofitablestoresanditsShopYourWaymembershipplatform.ManagementwillexecuteitsIntegratedRetailstrategyandtransformthecompany“fromastore-based,asset-intensivebusinessmodelintoamembership-focused,asset-lightbusinessmodel.
Figure3.SearsandKmartStoreCount
Source:BusinessInsider1.Note:Storecountfor2010-16asofendOctober.1InsideSears'deathspiral:HowaniconicAmericanbrandhasbeendriventotheedgeofbankruptcy,BusinessInsider,8/1/17
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
BCBGBCBGwaslookingtoclosestoresandrestructure,asthecompanycopeswithaheavydebtburdenandanindustryshifttoonlineshopping,accordingtoBloombergnewsreportedonJanuary18,2017.
• Reasonforstoreclosings:Thepotentialplanforstoreclosuresislikelyduetofinancialdistress.BCBGispreparingforapossiblebankruptcyfilingasitfacedchallengesincludingacashcrunchanddebtpressure,accordingtoMinneapolisStarTribune.ThecompanyhashiredAlixPartnersLPtohelprestructureitsdebtload.Theretailerhasalsobeenadaptingtotheshifttoonlineshoppingbyclosingstoresandbuildingitsonlineplatform.
• Forecast:ThecompanyisreportedbyStarTribunetocloseabout120storesglobally,mostlyintheUS.However,noofficialannouncementhasbeenmadeforstoreclosureplans.Thebrandoperatesmorethan570boutiquesworldwide,includingmorethan175intheUS.
• CapitalDeployment:Thecapitalfreedwilllikelybeusedtoeasethecompany’sdebtburdenandinvestinupgradesforitsonlineplatform.
WetSealWetSealannouncedinearlyJanuary2017,thatitwillbeclosingallits171stores.TheretaileralsofiledforbankruptcyinearlyFebruary.
• Reasonforstoreclosings:Decliningtraffic,changingcustomerpreferenceandincreasingpopularityofonlineshoppingarethemajorreasonsleadingtoWetSeal’sbankruptcyproceeding.
• Bankruptcy:Twoliquidatorshavebeenappointedtooverseetheliquidationprocess.Anattempttoacquirefreshcapitalorabuyerhasfailed,asreportedbytheWallStreetJournal.WetSealhadpreviouslyfiledforbankruptcyin2015,andsubsequentlywasboughtbyprivate-equityfirmVersaCapitalManagementLLCfor$7.5millionincashatthetime.
• Financialcondition:WetSealreportedlistedassetsof$10–50millionandliabilitiesof$50–100million.
AmericanApparelAmericanApparelhasbeenundergoingbankruptcyproceedings.Ithasagreedtosellitsintellectualpropertyandotherassets,whichexcludethe110stores,toGildanActivewearIncfor$88millionunderabankruptcyauction.
• Reasonforstore closings:AmericanApparel’sbankruptcy declarationisprimarilyduetodecliningsalesandthebrand’s failuretorepositionitselfinthefaceofchangingconsumertastes. Thebrand’shypersexualizedimagehaslostitsappealwith consumers.AmericanApparelpreviouslyfiledforbankruptcyin October2015.Itsufferedfromthehigh-interestdebtaccumulated duringthetenureofDovCharney,theformerCEOuntil2015.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
• Bankruptcysale:AmericanApparelhasagreedtoselling$88millionofintellectualpropertyandotherassets,excludingits110stores,toGildanActivewearInc.Someofthestoreswillremainopenforanotherthreemonthsundera100-daylicensewithGildan.Itisunclearwhatwillhappentothestoresoncethelicenseexpires.GildandoesnothaveanyintentiontoacquireAmericanApparel’sstores.
TheLimitedTheLimitedannouncedinthefirstweekofJanuary2017,thatitwasintheprocessofclosing250stores.ItsubsequentlyfiledforbankruptcyonJanuary17,2017,andhasagreedtoastalkinghorsebidforitsintellectualpropertyandsomeotherassets.
• Reasonforstoreclosings:Slowingmalltraffic,decliningpopularityofthebrand’sofferingsandtheriseofe-commercesaleshavecontributedtoitsbankruptcy.TheLimitedexperiencedthedepartureoftwoCEOsintwomonths—DianeEllisleftinOctober2016andherreplacementalsoleftinDecember2016.
• Bankruptcysale:Anaffiliateofprivate-equityfirmSycamorePartnershasannounceda$25.75millionstalkinghorsebidforthecompany’sintellectualproperty,whichincludesitstrademarks,websiteaddressandsocialmediaaccounts.
• Long-termplanning:TheLimitediscurrentlyevaluatingstrategicalternativesforitse-commercebusinessandintellectualproperty,inadditiontoconsideringasaletoapotentialbuyer.
Figure4.USApparelRetailSales—PerformancebyChannel,2006–2016CAGR
Source:Euromonitor
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
ManagementChanges
RalphLaurenRalphLaurenannouncedonFebruary2,2017,thatStefanLarsson,PresidentandCEO,willleavethecompanyeffectivefromMay1,2017.
• Reasonfordeparture:OutgoingCEOLarssonhad“differentviewsonhowtoevolvethecreativeandconsumer-facingpartsofthebusiness”withRalphLauren,thecompany’sExecutiveChairmanandChiefCreativeOfficer.
• Replacementplan:RalphLaurenhascommencedasearchforanewCEO.Intheinterim,CFOJaneNeilsenwillleadthecompany.
• ProfileofoutgoingCEO:LarssonhasservedasthePresidentandCEOofRalphLaurensinceNovember2015andreportedtoExecutiveChairmanRalphLauren.Duringhistenure,hecutjobs,closedstores,improvedtheonlineexperienceandstreamlinedthesupplychain.PriortojoiningRalphLauren,Larsson’sbackgroundwasinbudgetapparel:heservedastheGlobalPresidentofOldNavyandH&M.
• Strategicchangesaccompanyingthemanagementchange:None.ThenewCEOisexpectedtoexecutetheWayForwardPlan,announcedinJune2016,todrivefuturegrowththroughrefocusingthebrand,evolvingtheproductandmarketing.ThenewCEOwillneedtoreversethechallengesofdiscounting,overrelianceondepartmentstoresandanagingcustomerbase,whichthebrandhasfacedinrecentyears.
Figure5.USApparel—Same-StoreSalesGrowth,2011–15
Source:Euromonitor
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
Tiffany&Co.Tiffany&Co.announcedonFebruary5,2017thatCEOFredericCumenalwouldstepdown,effectiveimmediately.ThecompanyreplaceddesigndirectorFrancescaAmfitheatrofwithReedKrakoffasChiefArtisticDirectorinJanuary,effectiveFebruary2017,andreplacedRalphNicolettiwithMarkErcegasCFOinOctober2016.
• Reasonfordeparture:Theboardisdisappointedbyrecentfinancialresultsandweakholidaysales.
• Replacementplan:TiffanyhascommencedasearchforanewCEO.ChairmanandpreviousCEOMichaelKowalskiwillserveasinterimCEO.
• ProfileofoutgoingCEO:OutgoingCEOCumenalassumedthepositionofCEOinApril2015andheldseniorroleswhenheoversawthecompany’sglobalexpansionanddevelopmentofnewcollections.PriortojoiningTiffanyin2011,CumenalheldseniorleadershippositionsatLVMHGroup,includingasPresidentandCEOofMoet&Chandon.
• Strategicchangesaccompanyingthemanagementchange:None.Thecompanyiscommittedtoitscorebusinessstrategies,whichincludeenhancingcustomerexperienceandmarketingeffectiveness,increasingtherateofnewproductofferingandoptimizingthestorenetworkandcosts.Managementalsoaffirmeditsguidanceforfiscalyear2016.TiffanyfacedchallengesonthebackofastrongUSdollarandadeclineintourismspendingacrossallregions.
Abercrombie&FitchAbercrombie&FitchannouncedonJanuary30,2017,theappointmentofWillA.SmithasChiefMarketingOfficer.OnFebruary1,thecompanymadeanotherannouncementthatthecurrentPresidentandChiefMerchandisingOfficer,FranHorowitz,hadbeenpromotedtoCEO.JoanneCrevoiserat,ExecutiveVicePresidentandCFO,wasalsopromotedtoCOOwhilecontinuinginhercurrentroles.Allappointmentsareeffectiveimmediately.
• Reasonsforappointments:Smith’sintroductionaimstostrengthenAbercrombie’sconnectionwiththecustomerandenhancethepowerandclarityofthebrandidentities.
ThepromotionofHorowitzendsatwo-yearperiodwhenthecompanywasrunbyanOfficeoftheChairman—whichincludedHorowitzandExecutiveChairmanArthurMartinez—whichwasestablishedafterthedepartureofthenCEOChristosAngelides.
• Profileofnewmanagement:SmithhasservedinseniormarketingrolesatCaleresInc.(formerlyknownasBrownShoeCompany)forthepastnineyears,assumingthepositionofChiefMarketingOfficerforFamousFootwear/BrownGroupRetailin2013.Duringhistenure,thecompanyachievedrapide-commercetrafficgains.Heledtheparentcompany’scorporaterebrandinginitiativeandrevitalizedacustomer-loyaltyprogramthatnowdeliversnearly
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
three-quartersoftheorganization’stotalannualrevenue.PriortojoiningtheFamousFootwear/BrownGroupRetail,SmithworkedforiconiccompaniessuchasKraft,AtlanticRecordsandLizClaiborne,invariousbrandandmarketingroles.
Horowitz,hasservedasPresidentandChiefMerchandisingOfficerofAbercrombie&FitchCo.,wheresheshowedstrongleadershipintheturnaroundofHollister.PriortojoiningAbercrombiein2014,HorowitzheldvariouspositionsatAnnTaylor,Loft,Express,Bloomingdale’s,BergdorfGoodman,BonwitTellerandSaksFifthAvenue.
Crevoiserat,hasbeenExecutiveVicePresidentandCFOofAbercrombie&FitchsinceMay2014,andamemberoftheOfficeoftheChairmansinceOctober2015.PriortojoiningAbercrombie,sheservedinanumberofseniormanagementrolesatKohl’sInc.,includingExecutiveVPofFinanceandExecutiveVPofMerchandisePlanningandAllocation,andheldseniorfinancepositionswithWal-MartStoresandMayDepartmentStores.
• Strategicchangesaccompanyingthemanagementchange:None.Thecompanyisdedicatedtoprovideacompelling,customer-focusedshoppingexperience.WhiletheseappointmentsreflectastructuralmanagementchangethatresultsinthedissolutionoftheOfficeoftheChairman,whichhadbeenleadingthecompanysincethedepartureoflong-timeCEOMikeJeffriesinDecember2014,theydonotaffectthecompany’scorestrategies.Alongwiththemanagementappointments,theretaileralsoannouncedthatitwouldbecutting150jobsatitscompanyheadquartersaspartofcost-reductioninitiatives.
BarneysOnFebruary2,BarneysnamedDaniellaVitaleasitsnewCEO,replacingherpredecessorMarkLee,whowilltakeonanewroleasExecutiveChairman.
• Reasonforappointment:ThesuccessionplanforVitaletobecomeCEOin2017wasformallysetoutin2012.
• Profileofnewmanagement:AformerheadofGucci,MarkLeejoinedBarneysasCEOin2010.LeerecruitedVitale,hislongtimeGuccicolleague,whenhejoinedBarneys.VitalewaselevatedtothetopjobfromherpositionasCOOoverseeingallofwomen’smerchandising,businessdevelopment,digitalstrategyandstoreoperations.ShepreviouslyworkedatGucci,GiorgioArmaniandFerragamoUSA.
• Strategicchangesaccompanyingthemanagementchange:None.Themanagementturnoverisanaturalandexpectedprocess.LeenamedVitaleashis“heirapparent”,andhadbeenmentoringheroverthepastsixyears.Thecontrollingholderofthecompany,hedge-fundmogulRichardPerry,alsoexpressedstrongconfidenceinVitale’scapacityinday-to-daymanagement.LeewillcontinuetosupportPerryattheboardlevel.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
GivenchyGivenchy,ownedbyLVMHMoëtHennessyLouisVuitton,announcedonFebruary2,2017,thatCreativeDirectorRiccardoTisciwouldbeleavingafter12yearswiththebrand.
• Reasonfordeparture:Tisci’svoluntaryresignationtofocusonhis“personalinterestsandpassions”waseffectiveJanuary31,2017.ThereareunconfirmedspeculationsthathewilljoinVersace.
• Replacementplan:Givenchystatedthatasuccessorwillbeannouncedsoon.
• ProfileofoutgoingCreativeDirector:AccordingtotheNewYorkTimes,TiscitransformedGivenchyintooneofLVMH’smostsuccessfulbrands.Herevivedthebrandandwasanearlyadopterofsocialmedia.SinceTiscijoinedGivenchyin2005,thenumberofemployeesmorethantripledandstoresincreasedfrom7to72.
• Strategicchangesaccompanyingthemanagementchange:Tobeconfirmed.
CoachCoachannouncedonJanuary4,2017,thatithadappointedKevinWillsasitsCFO,effectivenolaterthanMarch2017.
• Reasonforhiring:WillswashiredtoreplacepreviousCFOJaneNielsen,whodepartedCoachforRalphLaureninAugust2016.WillswilltakeoverfrominterimCFOAndreaResnick
• ProfileofincomingCFO:Willshasalmost30yearsofexperienceinretailandfinance.HejoinsCoachfromAlixPartnersLLP,aglobalbusinessadvisoryfirm,whereheservedasManagingDirectorandCFOsinceMarch2014,andspecializedincorporateturnaround,capitalrestructuringandM&As.PriortoAlixPartners,Willsservedfor16yearsinvariousseniorleadershippositionsatSaksFifthAvenue.
• Strategicchangesaccompanyingthemanagementchange:Tobeconfirmed.Coach’sundertakingssinceCEOVictorLuistookoverin2014include:1)attemptingtoelevatebrandperception;2)appealingtomorefashion-engagedconsumers;3)launchingabroaderhigh-endcollection;and4)seekingacquisitionstobroadentheportfolio.Thecompanysawprofitgrowthforfiscalyear2016,areversalfromthedecliningsalesandstoresclosuresofthepastthreeyears.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
February10,2017
DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:[email protected]
MatthewLeeResearchAssistant
ZaneYangResearchAssistant
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