Ralph Lauren CEO Stefan Larsson and Ralph Lauren himself are parting ways, citing irreconcilable differences.
The company announced Larsson will depart from his position on May 1 and a search for a new CEO will be underway. The company’s “Way Forward” turnaround plan will be led by CFO Jane Nielsen until Ralph Lauren determines Larsson’s successor.
“Stefan and I share a love and respect for the DNA of this great brand, and we both recognize the need to evolve. However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business,” COO and executive chairman Ralph Lauren said. “After many conversations with one another, and our Board of Directors, we have agreed to part ways.”
In June, Ralph Lauren launched its Way Forward plan, which will refocus on Ralph Lauren’s iconic market presence and prioritize consumers. As part of the plan, Ralph Lauren will evolve its product and shopping experience to increase desirability, change its operating model to promote sustainability and implement an ROI-driven financial model to invest in the brand and promote high-quality sales. Ralph Lauren’s leadership team will also be streamlined to six layers for greater executive efficiency.
“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,” Larsson said. “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.”
On Thursday, Ralph Lauren also released its third quarter fiscal 2017 results. The company brought in net revenues of $1.7 billion, which aligned with the Way Forward plan. Overall revenue declined 12 percent compared to last year on a reported basis, and international net revenue declined 6 percent in the third quarter. Meanwhile revenue for North America was down 15 percent compared to the same period in 2015. On an adjusted basis, gross profit was $997 million and gross profit margin was 58.2%, which was 140 points above last year and primarily driven by sales metrics improvement. The company also projects its Fiscal 2017 restructuring activities and Way Forward plan will result in an estimated $220 million of annualized expense savings.