The
period of former CEO Stefan Larsson at Ralph Lauren was challenging, often
described in the media as a "disastrous" or difficult period, marked
by significant financial struggles and a high-profile clash with the founder
over the company's creative direction.
The
Context of Larsson's Tenure
Appointment
and Mandate: Larsson, a respected retail veteran credited with the success of
Old Navy and H&M, was appointed CEO in late 2015. His primary mandate was
to revitalize the brand, which was seen as stagnant and overly reliant on
licensing agreements. He launched a "Way Forward Plan" that involved
closing stores, cutting jobs and costs, and reducing lead times to market,
similar to the fast-fashion model.
Financial
Struggles: Despite the plan, the company's financial performance continued to
decline during his short tenure. The company reported a 12% fall in revenue
during the holiday quarter of 2017, and its stock price lost more than a fifth
of its value between his appointment and departure.
Creative
Clashes: The main reason for his departure, announced in February 2017 after
less than two years, was a fundamental disagreement with founder and executive
chairman Ralph Lauren. Ralph Lauren, who remained the creative director, wanted
to maintain control over the product, marketing, and store experience, while
Larsson sought control over all aspects of the business to implement his
turnaround strategy.
Summary
of the "Disastrous Period"
The
period was seen as a "brand in crisis" by analysts due to:
Poor
results: A series of declining sales and profits.
Internal
strife: Public "management squabbling" and "significant internal
wrangling" between the new CEO and the founder.
Uncertainty:
The sudden departure of the CEO created significant uncertainty about the
future direction of the company, further rattling investors.
Larsson
ultimately left the company in May 2017 with a $10 million severance package.
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