Clash at Ralph Lauren: CEO to leave

It doesn’t pay to clash with Ralph Lauren, one of the most iconic names in fashion retailing.



Ralph Lauren Corp. and president and CEO Stefan Larsson have “mutually agreed to part ways,” with Larsson staying on until May 1, 2017, the company said in a statement. Larsson’s departure follows disagreements with Lauren, 77, the company’s founder, executive chairman and chief creative officer. Jane Nielsen, CFO, will head up the business while it hunts for a new CEO.



Larsson was the first person to hold the title of CEO of Ralph Lauren other than its founder.



“Stefan and I share a love and respect for the DNA of this great brand, and we both recognize the need to evolve,” stated Lauren. “However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business. After many conversations with one another, and our Board of Directors, we have agreed to part ways.”



Neil Saunders, managing director of research firm GlobalData Retail, said the sudden departure of Larsson gives the impression of a brand in crisis, “and we believe it signals significant internal wrangling over the future direction of the firm. It also demonstrates the founder’s continued dominance over the business,” he added. (For more analysis by Saunders, click here.)



Larsson took the reins at Ralph Lauren in November 2015, charged with reinvigorating the brand, which had been tarnished by discounting and promotions and declining department store sales. Also, it was not effectively targeting millennial shoppers.



One of retailing’s rising stars, Larsson arrived at Ralph Lauren from Old Navy, where was global president. Prior to that, he was with fast-fashion giant H&M, which he is credited with helping to turn into a global retail powerhouse.



Ralph Lauren said it remains committed to the turnaround strategy Larsson launched last spring. Called the Way Forward Plan, the program involves closing stores, reducing costs (including slashing jobs), cutting production lead times, and a corporate restructuring.



“In June, we announced a plan to refocus the company on what made it iconic, evolve that for today and build our brand to its full potential,” stated Larsson. “That plan is on track — I am proud of the progress the whole team has made and I am committed to ensuring its uninterrupted execution. Ralph will always be an inspiration to me, and I am grateful to have had this experience.”



The news of Larsson’s upcoming departure was made as the company reported dismal third quarter results in which net revenues decreased 12%, compared to the year-ago period.