Ralph Lauren hires Old Navy executive to replace him as CEO
(Reuters) - American designer Ralph Lauren, who built a fashion powerhouse on luxury designs inspired by country club chic, announced Tuesday he is stepping down as chief executive officer and named the head of Gap Inc's populist Old Navy brand to the position.
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 on the news.
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 effects.
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 is credited with reviving sales at the Old Navy division, successfully implementing a model of offering trendy clothes at low prices. Continued...