Apparel executives were nothing if not entertaining this year, with some completely misleading shareholders about plans to raise capital followed immediately by a stock sale to raise capital, and others blaming overly thick thighs for pilling in pants. These blunders have brought on scrutiny in all cases, left stocks battered in some and, in one instance, forced a founder from his post.
Here’s a look at seven flubs from 2013 that executives will be glad to leave behind in the new year.
After indignantly insisting that it was flush with cash and had no intention to sell more shares, JCP’s sudden issuing of eighty-four million new shares distempered markets worldwide and left its shareholders feeling betrayed. David Glick, retail analyst at Buckingham Research Group, said, “The underlying reasons for this sudden need for expensive capital, the damage to JCP’s credibility, and the more challenging than expected consumer environment all pose threats to the pace of JCP’s recovery.”
Sears CEO Eddie Lampert hasn’t figured out a way to attract customers, but he’s peerless when it comes to attracting criticism. Economist and New York Times columnist Paul Krugman volunteers scathing judgment.
Ron Johnson is gone. The now ex-CEO of J.C. Penney and former Apple executive was fired in April, to be replaced by former CEO Myron “Mike” Ullman, according to a J.C. Penney press release and sources quoted by CNBC. Shares were up almost 6 percent on the news in after-hours trading.
Concluding a very public and contentious dispute, hedge-fund manager William Ackman officially resigned from the board of J.C. Penney. The fracas detonated like a bomb when Ackman publicly released two scathing letters he sent to the board, upbraiding them for dragging their feet replacing Mike Ullman, the CEO of J.C. Penney who replaced ousted Ron Johnson.
After Robin Lewis, co-author of The New Rules of Retail and CEO of newsletter The Robin Report, told Business Insider that Abercrombie CEO Mike Jeffries doesn’t want larger people shopping in his stores and that “he doesn’t want his core customers to see people who aren’t as hot as them wearing his clothing,” similarly unbecoming comments from the CEO resurfaced, launching public outrage.
Lululemon Athletica, looking to recover both some lost business and reputation after an embarrassing snafu resulted in virtually see-through yoga pants, hired a new chief product officer formerly employed by Sears Holding Corp. Tara Poseley, recently president of apparel for Kmart (owned by Sears), has garnered a sterling reputation in the retail industry for her deep knowledge of merchandising, branding and product design. She replaced Sheree Waterson, who resigned on the heels of the yoga pant debacle.
Lululemon founder Chip Wilson said some women just can’t wear the athletic clothing company’s yoga pants–namely, women with oversized thighs. Wilson, who is also chairman of Lululemon’s board of directors, appeared on Bloomberg Television’s “Street Smart” to talk about the sheer pants problem, a production failure with the company’s luon line that bared women’s bottoms as they posed in downward-facing dog.