In retail's top echelons, female CEOs are losing some ground
At the start of this year, a slew of major retailers were searching for the right person to fill their chief executive roles. Most of those companies have now found that person, and in almost every case, it was a man.
In recent months, major retailers such as Gap, Stitch Fix, Victoria's Secret, Kohl's, the Vitamin Shoppe and the RealReal have appointed men to CEO positions previously held by women. Others such as Macy's, VF Corp. (which owns the North Face and Timberland) and Italian denim brand Diesel replaced men with men at the top.
And then there's Bed Bath & Beyond. Sue Gove was CEO of the homegoods retailer before it filed for bankruptcy in April. The company has since been revived by Overstock.com, which bought the bankrupt retailer's intellectual property and assumed its name. This month, Overstock's top executive, Jonathan Johnson, became CEO of Bed Bath & Beyond.
In general, it is rare for a female CEO to be succeeded by another woman regardless of the industry, according to an analysis by Catalyst, which works with hundreds of companies to advance the careers of women.
“It reminds me of the Barbie movie,” said Kimberly Lee Minor, who is the CEO of the consulting firm Bumbershoot and has been working in the retail industry for 30 years. “We live in this society where women control the majority of consumer spending. They make the decisions and yet we still haven't moved forward and we have to go into this cycle.”
While the number of female CEOs had been trending upward in recent years, nearly 90% of Fortune 500 companies are run by men. Of the 86 retail companies in the Fortune 1000, 13 had a woman as CEO as of July, down slightly from the year before, according to the executive recruiting firm Heidrick & Struggles.
Retail executives have long been quick to note that purchases are largely driven by women, who make most of the spending decisions for their households. The majority of the industry's entry-level workforce also is female. Seventy-two percent of cashiers are women and about half of retail salespersons are women, according to data from the Bureau of Labor Statistics.
One of the reasons many companies are turning to men may be explained by the economic tension retailers are feeling in 2023. In times of uncertainty, companies become more risk averse and seek executives who have the financial expertise and proven track records at previous companies, according to academics and people who work at executive search firms. That tends to perpetuate previous hiring decisions and lead to companies seeking those with experience leading a turnaround.
While the U.S. economy has avoided a recession that many feared could come in the first half of 2023, there are still a lot of difficulties for retailers to navigate. Companies are adjusting to a base of consumers who are not readily spending as they were in the early stages of the pandemic, when people collectively had more savings. Clothing retailers and their shareholders are feeling the squeeze as shoppers respond to stubborn inflation by pulling back on purchases of discretionary items. Despite progress made during the pandemic, the industry is still contending with the reality of e-commerce, the changing role of stores and the challenges and opportunities presented by artificial intelligence.
“Gender representation and just overall diversity representation is here to stay, certainly at any consumer company and definitely at any retailer,” said Catherine Lepard, who leads executive searches for retail firms at Heidrick & Struggles. “However, what we have seen in 2023 — because so many retailers have found this to be a very difficult year — is that the first priority is just to make sure they've got the right athlete in the job, regardless of any other factors, to get the job done, to make sure that there is still going to be a company going in 2024 and a sustainable future for all of the employees and stakeholders.”
Christy Glass, a professor of sociology at Utah State University who has been studying gender and racial representation within corporate America for 16 years, said she was not surprised by the current hiring trend. Her research has shown that women are often appointed to CEO roles when a company is looking to show a bold strategy in the face of a precarious financial situation, a concept often referred to as the glass cliff. This tracks with Gove's appointment at Bed Bath & Beyond and the hiring of Sonia Syngal as the CEO of Gap Inc. in March 2020, just as the coronavirus pandemic was coming into full view. (Syngal left the company in July 2022, and Gap recently hired Richard Dickson as CEO.)
The more hiring of men to CEO roles could be seen as the “savior effect,” said Glass, who is working on a forthcoming study about executive dismissals.
“I think during a crisis, the glass cliff would claim that the logic there is, `let's show shareholders, let's show the public, let's show stakeholders, we're going to go in a bold new direction,' and part of signaling that bold new direction is appointing a woman CEO,” Glass said. “Whereas then the savior effect is a way of saying, `OK, we tried that. We're going to kind of go back to the status quo: safe and steady to navigate through this crisis.'”
There are reasons for optimism, however. Lorraine Hariton, CEO of Catalyst, noted that the percentage of women running Fortune 500 companies had doubled in the past five years (rising to 10.4% from 4.8%).