Rizzo Out, Stec In as Isaacs CEO

NEW YORK – Peter Rizzo resigned Thursday as chairman, chief executive officer and a director of I.C. Isaacs & Co. Robert Stec, a director of the company since 2002, has been appointed interim CEO of the company, which designs and markets François & Marithé Girbaud jeanswear and sportswear in the U.S. and Puerto Rico.

Rizzo joined the company as CEO in December 2003 and became chairman and a director in 2004 after serving for two years as a consultant to the Neiman Marcus Group. He was president and vice chairman of Neiman’s Bergdorf Goodman unit between 1999 and 2002 and president of Polo Ralph Lauren’s retail group for two years prior to that. Earlier in his career, he spent 19 years with Barneys New York, where his last post was executive vice president and head merchant.

Stec has had a long-running relationship with the Girbaud business and served as president of VF Corp.’s Girbaud division between 1989 and 1993 and as a consultant to the Girbaud business in 1997 and 1998. Concurrently, he was president of London Fog Industries.

Stec left the apparel industry in 1999 to become president and CEO of Lexington Home Brands. Lexington was acquired by Sun Capital Partners in 2002, but Stec remained an investor in the firm even after stepping down as its CEO last June. He is currently chairman and CEO of Prestige Brands of North Carolina, a niche furniture supplier, and founder and CEO of Brand Force One, a marketing consultancy.

I.C. Isaacs didn’t issue a press release about Rizzo’s departure but instead, as a public company, filed the details in a Form 8-K with the Securities and Exchange Commission. Details of Stec’s compensation will be released within four days, according to the SEC form.

No reason was given for Rizzo’s exit, but it’s been clear since January that the company was failing to meet its sales and marketing objectives. On Jan. 24, the company said that its full-year earnings per diluted share were expected to fall within a range of $0.61 to $0.63, below earlier estimates of $0.76 to $0.78, on “lower than anticipated” sales. Sales for the year, filed with the SEC earlier this week, declined 1.3% to $82.2 million. Men’s sales were up 1.9% to $70.6 million while women’s fell 17.1% to $11.6 million.

“The fourth quarter retail environment proved to be challenging, particularly for our independent specialty accounts which make up nearly 80% of our business and which typically function on a short cash cycle,” Rizzo commented in January. “As a result, we experienced unanticipated cancellations and returns on pre-booked business as well as softer than expected in-season sales trends.”

He indicated that the backlog for the first quarter at the time was 20% below prior-year levels.

“We believe that this issue is not specific to our brands or products, but is symptomatic of market-related issues for urban sportswear,” Rizzo concluded in his statement.

Shares of I.C. Isaacs plummeted in over-the-counter trading Thursday, ending the day at $1.00, off $0.45 or 31%. They’d been in decline since reaching a 52-week high of $6.20 on Oct. 31 and had fallen off sharply since the pre-announcement of earnings results in January.