Ralph Lauren, the US style icon who stunned fashion insiders on Tuesday by announcing that he would soon cede the role of chief executive at his company, had an urgent message for his employees the very next day: I am still in charge.
Media reports of his announcement had ignited “misconceptions” about how involved he would be in the company once the changes took place, Lauren said in a memo on Wednesday.
“I am not stepping down, nor am I stepping back,” said Lauren, who retains roles as executive chairman and chief creative officer at the company he has led for 48 years.
“I am stepping up,” he said.
As the largest individual shareholder, Lauren on Tuesday said at that Stefan Larsson, his replacement as chief executive officer, would report to him.
However, his memo, obtained by BuzzFeed and confirmed by a company spokeswoman, appeared to be an attempt to dispel any notion that Lauren would no longer be in charge or cede the final decision-making power.
Investors seemed to cheer the choice of Larsson, the president of Old Navy, who is also a former H&M executive.
Ralph Lauren stock surged 14 percent in trading on Wednesday, as the markets appeared to welcome the clarity that the move seemed to offer on the fashion house’s succession plans.
Larsson is a rising star in retailing, most recently credited with turning around Old Navy, Gap’s low-cost brand.
Gap shares spiraled almost 6 percent over concerns that the company was losing its standout executive.
Gap has said that Jill Stanton, Old Navy’s vice president for global product, is to succeed Larsson in an interim leadership role until a permanent replacement is named.
The leadership change at Ralph Lauren is seen as a bid by the company to get its financial house in order.
Its stock had declined by about 40 percent within the last year.
The move might signal the company’s willingness to learn some tricks from mass labels like Old Navy in response to pressure from a stronger dollar and tougher competition in luxury retailing.
“A new CEO could have a free hand to eliminate sacred cows” like cost, Michael Binetti, a retail analyst at UBS, wrote in a research note.
However, if Larsson is not given such free rein, Binetti said, revamping branding and increasing revenue at Ralph Lauren could be a challenge.
Still, the enthusiastic reception of the new chief executive officer — and the suggestion that Lauren was preparing for his succession — appeared to have caused some unease for Lauren.
In an interview on Tuesday before the announcement, Lauren called Larsson his “partner” and pledged to keep a hand in design until the fashion world started “designing things I can’t understand.”
And he seemed to anoint Larsson the heir to the Ralph Lauren empire.
Asked whether Larsson would make a good successor, Lauren said: “I would say so.”
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