Ralph Lauren (RL) named a new CEO on Wednesday, betting that a consumer products veteran with strong brand chops, but no apparel experience, can fix the iconic fashion company.
Patrice Louvet, who most recently oversaw Procter & Gamble’s (PG) global beauty business, will become CEO on July 17. His appointment follows the abrupt ousting of retail superstar Stefan Larsson after less than 15 months in the role after clashes with founder Ralph Lauren and the board of directors over how to restore the company to its former glory.
The departure of Larsson, a well regarded executive who had turned Gap Inc’s (GPS) Old Navy into a juggernaut after an enormously successful stint at H&M, was seen by investors as a setback in fixing a business whose brand was damaged by heavy discounting and whose sales were hurt by too much reliance on department stores and poor e-commerce execution.
Larsson was the first CEO of Ralph Lauren other than the 77-year-old designer himself, who founded the company 50 years ago and now serves as chief creative officer. Part of his appeal was his success at those nimbler retailers at a time when Ralph Lauren has been trying to adjust to the rise of fast fashion.
Lauren, hinting that he was looking for less drama in a new CEO, praised Louvet’s “collaborative working style” in a press release. “Finding the right partner to work with me to take us forward in our evolution has been my primary focus over the last several months,” he said.
The company is pursuing a turnaround effort it calls “Way Forward” that has involved deep cost cuts in the hundreds of millions, the closing of 50 stores (including its Fifth Avenue Polo flagship), the elimination of hundreds of jobs, and a management shakeup. Ralph Lauren has also said it would streamline its offerings and speed production.
Louvet is a 25-year veteran of P&G, the world’s largest consumer-products maker. He most recently ran the company’s $11.5 billion global beauty business that was sold last year to Coty (COTY) for $12.5 billion. Louvet had earlier overseen P&G’s Gillette lineup.
His brand expertise will likely serve him well, as Ralph Lauren sets about more clearly delineating its products from the surfeit of apparel in a market that has turned clothing into a commodity struggling to command higher prices. Ralph Lauren’s products have become fixtures at discount chains like TJX Cos’ (TJX) T.J. Maxx.
Even though Louvet has no direct apparel experience, Ralph Lauren is betting that his P&G experience, which included overseeing the branded beauty products for such names as Gucci and Hugo Boss, will give him insights into the fashion and luxury worlds.