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 Ralph Lauren Corp, founded by 75-year-old Lauren in 1967,
appointed Stefan Larsson, the global president of Gap's Old Navy
division, as CEO effective in November. Lauren will continue to
serve as executive chairman and head its design team, the
company said in a statement.
Lauren, who got his start designing neckties, plans to stay
active at the company and Larsson will report to him.
“When they start designing things I can’t understand, I’ll
quit,” Lauren told the New York Times in an interview.
Ralph Lauren shares rose 3.79 percent to $108 in trading after
the bell. Gap shares fell 3 percent to $29.30.
The company has been struggling to boost profits as a stronger
dollar reduces the value of sales from overseas. Net revenue in
its first quarter ended June 27 fell 5 percent, mainly due to
currency fluctuations.
Odeon Capital analyst Rick Snyder said the company had grown to
a size where it needed more "systems and controls." The change
in CEO "is just a natural progression," Snyder said.
Milton Pedraza, a fashion industry analyst at the Luxury
Institute, said Larsson’s appointment follows a trend of luxury
brands hiring leaders from mass-market companies in recent
months. He cited the appointment of Grita Loebsack, a former
vice president at Unilever Plc, as CEO of Kering's emerging
brands, which include Stella McCartney and Gucci.
Larsson, 41, is credited with reviving sales at Old Navy,
successfully implementing a model of offering trendy clothes at
low prices.
Annual sales at the division rose 8 percent in 2014 and became
Gap's biggest business. Sales for the division were $6.62
billion, or 40.3 percent of Gap's total.
Lauren's fashion empire includes some 25 brands including Polo,
Club Monaco and Denim & Supply, and the company makes clothing,
accessories, furniture, home decor items and footwear under its
labels.
Larsson, a Swede who before joining Gap was global head of sales
at Hennes & Mauritz, brings experience of managing a fast
fashion business with a supply chains considered to be among the
most efficient within the apparel industry.
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His appointment would be a good fit for Ralph Lauren which is
seeking to reorganize and centralize business units and brands,
Snyder said.
"If he comes from a place like H&M, he understands global supply
chains and that's one of the things that Ralph Lauren is trying to
implement right now," Snyder said. "It's going to be very positive
for them."
FROM WILD WEST TO HIP HOP
Despite the aura of Anglo-Saxon elitism around his company, Lauren
was born Ralph Lifshitz in the Bronx in 1939. His parents were
Jewish immigrants from Belarus, and he changed his name to Lauren at
age 16.
Lauren's designs drew inspiration from elite and exotic realms
including East Coast prepsters, the Wild West, colonists on African
safari and czarist Russia. He designed the wardrobe for the 1974
film version of "The Great Gatsby" including a pink suit for star
Robert Redford.
The Ralph Lauren Polo shirt, which debuted in 1972, became a
signature item for the company with a tiny polo player embroidered
on the chest.
His designs have been worn by presidential hopeful Hillary Clinton,
actress Gwyneth Paltrow and actor Johnny Depp.
Lauren was also, perhaps surprisingly, influential in the hip hop
world. His bright colors and bold clothing became staples for some
New York gangs, and rappers such as Kanye West and Lil Wayne have
mentioned Lauren and his designs in their rhymes.
The company also said that Jackwyn Nemerov, chief operating officer,
would retire in November at which time she will become an adviser to
the company.
(Reporting by Sneha Banerjee and Ramkumar Iyer in Bengaluru and
Siddharth Cavale and Kylie Gumpert in New York; Additional reporting
by Sharon Bernstein in Sacramento; Editing by Cynthia Osterman and
Lisa Shumaker)
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