Following his ouster from the Balenciaga creative director position last fall, Alexander Wang is taking on the role of CEO and Chairman of his 11-year old company, Alexander Wang Inc. Wang's appointment, which comes on the heels of Rodrigo Bazan leaving his position as the president of Alexander Wang to join fellow New York-based brand, Thom Browne, is simultaneously interesting and potentially rather worrying given the track record of brands that have forged similar paths in recent years.
Wang's increased role is compelling, as it is the latest development in a larger trend in the fashion industry of creative directors taking on increasingly numerous responsibilities (a progression that arguably commenced with the acquisition and corporatization of design houses in the 1980's). First, it was designers assuming the more far-reaching role of creative director and more recently, it is creative directors taking on wider-spread brand and business roles – whether officially as CEO or in a more unofficial capacity, as in the case of, say, Hedi Slimane, the omnipotent creative/pseudo-business force during his tenure at YSL.
The dual role of creative director and CEO is quite noteworthy, if for no other reason than that we are most accustomed to the two jobs being somewhat firmly separated. Alessandro Michele and Marco Bizzarri at Gucci (who succeeded Frida Giannini and Patrizio di Marco), Marc Jacobs and Robert Duffy, Raf Simons and Sidney Toledano at Dior, Tom Ford and Domenico De Sole, YSL and Pierre Bergé, etc. come to mind. Moreover, now - when companies are not just companies but multi-national brands with various collections, an array of licenses and complex webs of distribution networks - seems a less than ideal time to let creative directors take nearly all of the reigns, no?
But this is not just speculation. Consider two figures that resided on the aforementioned list - for some time, at least: Angela Ahrendts and Christopher Bailey. Yet, Burberry took the plunge, fusing the creative director and CEO roles, arguably out of necessity in May 2014. Yes, in May 2014, Burberry's chief creative officer, Christopher Bailey, officially stepped into the role of CEO, succeeding Angela Ahrendts, who led Burberry for almost eight years before joining Apple. In this capacity, in addition to serving as chief creative officer, a position he began occupying in 2009, Bailey is also responsible for the company’s overall image, including advertising and store design, and various business aspects, of course.
Wang’s appointment seems a surprising one given Burberry’s very public recent struggles. The result at Burberry has been a decline since Bailey’s assuming of the CEO role, in addition to the chief creative one. Early this month, Bailey, who has been grappling with subdued luxury demand and falling profits as he tries to cut costs and lift sales, suffered a 75% pay cut after profits fell at the London-based luxury fashion house. The announcement came on the heels of prolonged criticism from Burberry shareholders over Bailey’s dual role in the group, with some warning that tensions may come to a head at next month’s annual meeting.
After a year in which Burberry’s shares have fallen 36 per cent, at least two large investors are considering a vote against the re-election of Bailey as chief creative and chief executive officer — although they say such a move would be a last resort. “It was always a brave decision to give him the dual role and it is not clear that it is working out,” one top 20 shareholder told the Financial Times in May. Another said: Burberry is “in a situation where it does not look feasible for the chief executive to also be the chief creative person, too. They should let Bailey do what he does best, which is design. They need to make sure they use the real skills that he has. It feels like he has been overstretched in both positions.”
Bailey's role at Burberry isn't the first of its type, however. In fact, we saw something similar occur at Prada in 2014. Miuccia Prada began splitting time between her role as creative director and co-CEO. She stepped down from the company’s chairman position and now acts as co-chief executive officer along with her husband, Patrizio Bertelli. According to a statement from the house in early 2014, Miuccia “will concentrate on the day-to-day management of the business by devoting her time to guiding the further development of the group, mainly in the creative design and brands communications activities."
Like Burberry, Prada is in also financial trouble. Shares in both Prada and Burberry have lost significant value in recent years, and while we can certainly trace the roots of such woes to consumer fatigue and slowing sales in Asia, in particular, there is arguably something else at play. Namely, both companies have made moves that show poor business initiative. Both design houses seemingly put the brand first and business second (the result of having little separation between the brands' left brains and right brains, so to speak). For instance, as Luca Sola noted last year, "it is not unreasonable to question some of the extravagant cost commitments and strategic decisions taken on the back of 'brand worship' at both companies." This is just one example.
And it is against this case study that Wang, 32, is taking on additional roles at his eponymous label. It is worth noting that Wang’s label, a privately-held, largely family-run company, is significantly smaller (and more manageable?) than Burberry. According to a 2014 New York Times article: “The Alexander Wang company has been growing by approximately 20 percent a year for the last three years, had 2013 revenues of just over $100 million and will have 20 stores globally by year end; in 2015, it is to open its first free-standing European store, and largest store over all, in London.” Compare this with Burberry’s $3.9 billion in annual sales for 2015 and its network of roughly 500 stores in over 50 countries.
In this way, maybe the C-Level changes at Alexander Wang will not be the crash and burn that Burberry is (this is absolutely up for debate). Moreover, maybe this is par for the course of evolution of the already in-flux and growing role of the designer, the latest development towards the ultimate all-controlling figure a la Hedi Slimane (circa YSL round 2). But lest we forget that Slimane is something of a special case and while he may have taken on an increased role during his tenure at YSL, he had support the entire time by way of CEO Francesca Bellettini, thereby, making him an honorary-type of CEO and not a dual-roler. There is a big difference there, and it is one that is arguably reflected in the growth of YSL during Slimane's tenure versus the decline of Burberry during Bailey's.
So, traverse with caution, Mr. Wang.