Stefan Larsson, chief executive of Ralph Lauren, is leaving after less than two years in the job following clashes with the company’s 77-year-old eponymous founder over the future of the clothing empire.
Mr Lauren said he and the company had “agreed to part ways” after “differences”, and that a search would be conducted for a replacement. Mr Larsson will receive $10m in severance paid in the form of a salary over the next two years, according to an SEC filing.
“Stefan and I share a love and respect for the DNA of this great brand,” said Mr Lauren. “However, we have found that we have different views on how to evolve the creative and consumer- facing parts of the business.”
Mr Larsson, who will leave in May, said they disagreed on how to evolve “product, marketing and shopping experience”. He added: “I’ve spent my whole career in family controlled businesses. So we worked hard to find common ground, but we didn’t and that’s what led to this mutual decision.”
Shares in Ralph Laurenfell 11 per cent following the news. His arrival at the retailer in November 2015 was greeted with much fanfare after he drove a turnround at Old Navy, Gap’s largest division, and helped H&M become a leader in fast fashion.
Under his leadership Ralph Lauren unveiled its “Way Forward Plan” cutting jobs and shutting underperforming stores to focus on core products, as well as removing three layers of management. It also tried to widen its appeal to shoppers that flock to fast fashion retailers such as Zara and H&M, which offer fashion at a fraction of the cost.
“Mr Larsson’s departure significantly heightens uncertainty around the future strategic direction of the company and causes [price to earnings] contraction,” said Jay Sole, analyst at Morgan Stanley. “The main reason to own this stock was the cost-cutting story, but Mr Larsson was the cost cutter.”
Chief financial officer Jane Nielsen will lead the turnround plan in the interim and said the company expected to return to revenue growth by fiscal 2019. Net revenues for fiscal 2017 are expected to record a low double-digit percentage decline.
Meanwhile, Givenchy, owned by LVMH, said artistic director Riccardo Tisci was leaving after 12 years. The Italian designer’s exit follows the departure of creative heads at Dior, Lanvin and Valentino in the last two years.
