A FASHION VICTIM
Ralph Lauren CEO Larsson back on the street
Fifteen months ago, Ralph Lauren finally relinquished the reins at the fashion empire he founded a half-century earlier.
On Thursday, he grabbed them back.
Stefan Larsson — the company’s first-ever outside chief executive, handpicked last year by Lauren as his successor — is leaving on May 1.
As they revealed the surprise split in a written announcement, Ralph Lauren execs tried hard to portray it as orderly and amicable.
Still, Larsson, 42, who had joined the company after a stint at the top of Gap’s Old Navy chain, admitted on a conference call that he’d worked “very hard over the past month to find common ground” with Lauren — to no avail.
“That’s what led to this mutual decision today,” Larsson added.
The Swedish-born exec tangled with 77-year-old Lauren over how to revive the American brand, which has struggled to attract millennials with its stodgy styles as traffic at shopping malls continues to tank nationwide.
“We both recognize the need to evolve,” Lauren said in a written statement. “However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business.”
Lauren, who remains executive chairman and chief creative officer, was stingy with details about the dustup, saying only that he and Larsson parted ways “after many con- versations with one another and our board of directors.”
The fashion house, meanwhile, admitted it doesn’t have a ready replacement for Larsson as it begins a search for a new CEO. Financial chief Jane Nielsen will take over his duties in the meantime.
That means executing the brand’s “way forward plan,” a turnaround initiative begun under Larsson, which thus far has shaken up management ranks, laid off workers and shuttered 27 stores with another 50 to go.
The news sent Ralph Lauren shares tumbling 12 percent, to close at $76.61, as Wall Street fretted that the company’s turnaround strategy might flop with the executive who spearheaded it gone.
“Stefan was the perfect pick,” said Instinet analyst Simeon Siegel. “The stock roared when he was hired.”
Ralph Lauren on Thursday reported a 12 percent drop in holiday quarter revenue to $1.71 billion, hurt by a slump in wholesale shipments to customers as consumer demand weakened.
Industry sources say the breakup is not entirely unexpected, given Lauren’s close involvement in the company he founded in 1967, when he began selling men’s ties to department stores.
Larsson’s exit, industry experts say, will make it tricky to find a top-notch successor.
“As long as Ralph is active in the company, they’ll have a difficult time recruiting an Aplayer,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm.
“A strong candidate needs to know he/she will be able to run the business as they see fit,” Siegel added.
Larsson will receive a $10 million severance package over the next two years.