CEO Shuffle at Zac Posen: What Changes at the Top Mean for the Brand
It's been a busy bunch of days at several brands, as their top executives move on or are ousted in favor of new (more profitable) blood. But at Zac Posen, what happens when the departing CEO is your mom? It's a clear signal of a strategy shift to boost sales.
Susan Posen, Zac Posen's mother and the designer's longtime business partner, is stepping aside to pursue other interests. Though the universally-adored fashion wunderkind has had ten years to grow his business, a constant bevy of Posen-clad celebrities on the red carpet hasn't translated to sales. Part of the reason is that Posen's posh frocks have remained just out of the common chicster's price range.
Susan Posen's influence has been felt since the beginning. However, the former M&A attorney who accommodated her son's first studio in her living room has been both at the helm as well as in the background. Most notably, Susan's recent turn as CEO saw Zac finally agreeing to work with Target on a capsule collection as well as the general move to more commercial assortments. Zac launched Z Spoke in February -- a lower-priced line sold at Saks (SKS). The company shed expenses and employees, and even moved some production from Italy to China to save money.
So how's the brand going to fare without Mrs. Posen's fiscally responsible hand on the wheel? Susan Davidson, CEO of Scoop NYC, is in charge of the results. She's going to helm both companies, which are owned by activist investor Ron Burkle's The Yucaipa Cos.
Davidson took the Scoop job amid serious financial woes in September of 2009. The chain's inability to pay its vendors last year was only compounded by the imbroglio of former employees suing for wage theft and labor violations and discrimination. 17 workers were seeking reimbursement of approximately $500,000 in unpaid wages and accused Scoop NYC management of avoiding paying overtime and other worker benefits by deceptive measures.
Davidson's no stranger to steering a course through retail hell. Her recent turn at Creative Design Studios is fraught with lackluster brand names such as Lord & Taylor and Joseph Abboud. The good news is that Davidson earned her chops at the likes of Liz Claiborne and Henri Bendel. She's also a former president of DKNY Jeans.
It will be interesting to see how Davidson navigates the rough road of commercial appeal vs. haute couture ahead -- not to mention how much of an influence Burkle plans to exert on these ailing companies.
Let's not forget that back in June, Burkle reported that he held over 4.3 million shares of American Apparel (APP), which amounts to a 6 percent stake in the company. The billionaire who made his fortune in the grocery business has more money to invest. If he can pull his head out of the contentious legal battle with Len Riggio over a majority stake in Barnes & Noble (BKS), he might be able to provide a little more than money to get these companies back on track.
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