Ralph Lauren has hired the chief financial officer of handbag maker Coach Inc. as part of a bid to reinvigorate the 49-year-old brand with fresh management. Jane Nielsen will join the fashion house as CFO in September, Ralph Lauren said in a statement on Thursday. In addition to overseeing the company’s finances, she’ll handle procurement, store operations, information technology and investor relations. Nielsen will replace CFO Bob Madore, who has held the post for just over a year.
Nielsen’s appointment, one of a series of recent changes, comes two days after Chief Executive Officer Stefan Larsson unveiled his “Way Forward” plan for the company. The former Old Navy executive is eliminating three management layers, slashing 1,000 jobs and shuttering more than 50 stores. He will also refocus on the company’s three core brands: Ralph Lauren, Polo and Lauren.
Nielsen’s areas of responsibility “all take center stage in the company’s turnaround plan as they provide much of the cost savings and efficiencies needed for margins to recover in the next two years,” said Chen Grazutis, an analyst with Bloomberg Intelligence. It makes sense for the CFO to oversee a broad swath of the company as it works to “flatten its structure and remove blocks,” he said.
Larsson has pledged to react faster to fashion trends and cut down the time it takes to bring clothes to market. He also wants to reduce excess inventory, helping it avoid discounting at department stores and off-price channels. The company said its earnings will suffer until results stabilize in fiscal 2018.
The company also appointed Bill Campbell corporate senior vice president of global supply chain and inventory management. The executive, who has spent the past 11 years at Amazon.com Inc. in distribution and logistics leadership roles, will start on Oct. 1.
In addition, Ralph Lauren named Jeffrey Kuster group president for the Americas. He will oversee sales through wholesale, retail, factory and e-commerce channels, as well as Latin America. His appointment is effective July.
Coach has been undergoing a turnaround plan of its own for almost three years. After falling for two years, Coach’s sales have rebounded in recent quarters, helped by new designs, updated stores and last year’s acquisition of designer shoe brand Stuart Weitzman. Both companies face a similar challenge: “trying to reverse the damages of discounting and recreating profitable sales growth from a lower base,” Grazutis said.
Ralph Lauren gained 2.6 percent to $96.18 at the close in New York trading on Thursday. The stock is down 14 percent so far this year. Coach lost 1.5 percent Thursday.