What does the recent high turnover of CEOs mean for the industry?
Those with a keen eye will have spotted that there has been a deluge of new CEOs announced in the past few months.
But why has there been such high turnover and what does it tell us about the industry?
Turnover among CEOs at the world’s 2,500 largest companies soared to a record high of 17.5% in 2018 according to PwC, with successors typically following long serving, struggling CEOs.
Here’s a quick flavour of what’s been going on recently…
Anya Hindmarch - Hindmarsh resumed control of the business, replacing former CEO Antoine Bejui who left in April.
Bally - Bally promoted COO Nicolas Girotto to CEO.
Clarks – New CEO Giorgio Presca has been tasked with rebuilding relevance for the brand.
Condé Nast - Roger Lynch, former head of music streaming service Pandora, has been appointed as the company's first global Chief Executive Officer. The publisher has been on the search for a new leader to stem financial losses and transform itself for the digital age.
Farfetch – Farfetch has appointed Browns chief executive Holli Rogers to the role of Chief Brand Officer, a newly-created position for the luxury online retailer. Farfetch chief executive and founder José Neves said Rogers “could bring her unique experience to the broader Farfetch business at an executive level”. “[Her] reputation, high regard among fashion CEOs, influencers and the wider industry, her relationships and her incredible aesthetic will be a huge benefit to Farfetch,” he added.
Guess - Carlos Alberini, who served as Guess’s President and COO more than ten years ago, was announced as their new CEO.
J. Crew - J.Crew Group named Michael Nicholson as interim CEO, who currently also serves as its president and chief operating officer, filling a role that has remained empty since the departure of Jim Brett last year. The company is also reportedly mulling an IPO of its Madewell business.
Kering - Bartolomeo Rongone, former COO of Yves Saint Laurent, is the new Chief Executive of luxury fashion label Bottega Veneta.
L’Oréal – Delphine Viguier-Hovasse was tapped as their new L'Oreal Paris President. The move comes as L’Oreal wrestles with sluggish growth in its consumer products division. L’Oreal China also appointed Fabrice Megarbane, former GM of L’Oréal Germany, as their new CEO.
PVH - Stefan Larsson was named president of PVH. Emanuel Chirico, Chairman and CEO said: “He is highly regarded for his strategic focus, proven leadership and global experience in driving transformation and brand building in an increasingly dynamic and ever-changing consumer landscape.” Cheryl Abel-Hodges was appointed as the new CEO of Calvin Klein.
River Island – Will Kernan, former chief executive of The White Company, is the new River Island CEO. Kernan said: “River Island is a British fashion stalwart, which continues to thrive in the fast-paced, multi-channel, retail environment. I have long admired the company and look forward to working with the talented and dedicated team to drive future progress”.
Sandro - Isabelle Allouch was named as the new CEO, having headed Claudie Pierlot for the last five years.
Scotch and Soda – Frederick Lukoff, former Stella McCartney President and CEO, is the new Scotch and Soda CEO. Lukoff said: “I am absolutely delighted to be joining Scotch & Soda and working together with the team to continue the international success story of this amazing Dutch fashion brand. I have a profound respect for Dutch culture, it’s approach to life and point of view on society. I believe there is space on the international fashion scene for that strong set of values to resonate even further.”
Sweaty Betty - Julia Straus was promoted to CEO.
Temperley – Temperley London apointed Luca Donnini, as the new CEO. He was previously with Max Mara and Guess.
Theory – Former CEO Andrew Rosen was replaced by Dinesh Tandon, who ran the Asia arm of the Theory business before moving to New York in 2017 to take on a more encompassing role as global chief operating officer. Tandon will work closely with Rosen and Theory Chairman Kazumi Yanai on the transition.
Zara - COO Carlos Crespo was appointed the new CEO, with Pablo Isla leading the company as Chairman. This has previously been a dual role and, according to an insider, apparently reflected the importance of technology at Inditex, given the owner of Zara, Massimo Dutti and Bershka is seeking to integrate online sales with its store network by focusing on large stores where customers might try on items to buy later online.
Adapting to the Environment
The skills set needed for the CEO of 2019 - recently described as the year of reckoning and urgent awakening - is very different from the skills set of old.
The fashion industry is grappling with some major challenges:
Economic downturns (did I hear someone mention Brexit?)
The lifespan of the fashion product is becoming more elastic as pre-owned, refurbished, repair and rental business models continue to evolve
Gen Z has a passion for social and environmental causes, unlike those before
An increase in social commerce as consumers demand discovery and purchase through the same channel
A decrease in brand loyalty and yearning for “newness”
New, disruptive brands and business models
A shift from products to experiences
The demand for more effective omni-channel strategies
New data-driven digital marketing strategies
Consumer-led ‘pull’ rather than ‘push’ sales, resulting in more made-to-order product
"Today an efficient CEO must face a radical change in the approach to the purchase by the consumer, with a great attention to the sales channels and the contents in which the products are communicated. They must also pay attention to the difficulties that a Corporation has in finding financial and human resources in the execution of its own strategic plans."
Hiring the Right CEO
I should acknowledge here that while changing CEO may be necessary, it can be incredibly disruptive for the brand. So the ideal is to find the right person from the start, someone:
Adaptable who can flex with the times
With passionate curiosity and team smarts
Willing to challenge tradition
Someone who continues to bring fresh perspective
What do our CEOs think?
Luca Donnini, CEO at Temperley London told us:
"[A strong CEO is someone who] is able to adapt their experience to the situation, listens carefully, proactively manages the action plan, follow-ups on short term goals, controls costs and resources, exploits tech and digital innovations, and is true to the brand's ethos."
In May, Anya Hindmarch told Drapers:
“In a rapidly changing retail and global environment, it’s time for businesses to be brave and decisive. We have been transforming our business model since 2017, taking advantage of our strengths in creativity, experiential and direct to consumer."
And as a CEO, who wished to remain anonymous, told us...
"A CEO always needs to bring vision and energy to an organisation and an ability to question how/why things are done. He/she can’t be weighed down by tradition (this is how we do things here) or the human relationships/office politics (which grow more complex and pervasive with time) that tend to diminish an organisation’s vitality.
So, if you think you might be reaching that tipping point, and are considering a new CEO, make sure you use every resource available to find the right candidate.
What do you think the current high CEO turnover tells us about the fashion industry and how CEOs now need to respond? We’d love to hear from you.