FASHION AND FINANCIAL WORLDS REACT TO RALPH LAUREN DEPARTURE
Yesterday we saw the end of an era. As previously reported by MR, Ralph Lauren has stepped down as CEO and will move to the position of Chief Creative Officer position to help guide his successor, Stefan Larsson, the global president of Gap’s Old Navy chain.
The reaction has been both of shock and celebration in the financial and fashion worlds. Placing Larsson, who has an impressive track record of sales growth at both H&M and Old Navy, as CEO of one of America’s favorite prep labels has fueled the continuing conversation on luxury versus fast-fashion.
Milton Pedraza, the CEO of research firm the Luxury Institute, told The Wall Street Journal: “You see a lot of luxury brands now recruiting from other industries. They need executives with skills the luxury industry doesn’t necessarily have such as an expertise in global distribution or digital marketing.”
The appointment of Larsson, who will become CEO of Ralph Lauren in November, has had a major impact on both companies’ stock prices.
As of 3pm on Wednesday, Ralph Lauren stock had jumped nearly 13 percent, on top of a 4 percent gain Tuesday in after-hours trading. The uptick is a boom to Lauren, which has nosedived 44 percent since the beginning of 2015.
Meanwhile, by 3pm, Gap stock had gone down about 6 percent for the day, an acknowledgment that Old Navy sales have been consistently better this year than sister brands Gap and Banana Republic. Results might have been even worse had not Jill Stanton, Old Navy’s global product chief, been named as the successor to Larsson on an interim basis.
As for the designer himself, he was more sanguine. In an interview with The Associated Press, Lauren insists that this move is for the better and will promote positive change within the company. He also asserts that he will not be stepping back completely from the business.
“I am not coming in once a week. No. That’s not the plan,” he told the AP. “The plan is we have a great company. We’ve always had a great company. Whether the stock is up or down or sideways, you can’t evaluate it by this moment. You evaluate it on the long-term basis. So my growth has been long-term. My planning has always been long-term. I am always looking for the future and bringing in the right people that will build the company.”
“It’s about talent and vision and sensitivity,” Lauren continued. “The company is about growth, and newness is a constant. And how to keep the beat of the company. And I feel Stefan has that beat.”