Retail CEOs Who Got Fired for Missing Tipping Points
"14 CEOs Who Got Axed After Failing To Navigate Disruption"
- John Akers (1993, IBM)
- Robert Nakasone (1999, Toys R Us)
- Gary DiCamillo (2001, Polaroid)
- John Antioco (2007, Blockbuster)
- Mike Lazaridis & Jim Balsillie (2012, BlackBerry)
- William Lynch (2013, Barnes & Noble)
- Ronald Boire (2016, Barnes & Noble)
- Mark Fields (2017, Ford)
- Jeff Immelt (2017, GE)
- Mickey Drexler (2017, J. Crew)
- Jan Singer (2018, Victoria’s Secret)
- Steve Stagner (2018, Mattress Firm)
- Margo Georgiadis (2018, Mattel)
- Camillo Pane (Coty, 2018)
Retail is among the many industries that are rapidly changing and require leadership that can move seamlessly past tipping points. As boards across a wealth of industries face changing environments, many are moving to place and replace leadership to fit these needs.
Approximately 1,452 CEO changes happened in 2018, a 25% increase from the CEOs who left their posts in 2017, according to Challenger, Gray & Christmas. Those departures are just shy of the highest annual total on record in 2008, during the financial crisis.
Additionally, 129 CEOs left their posts in the last month of 2018, capping the highest quarterly total for CEO changes since Challenger began tracking in 2002.
While about 27% of last year’s CEO changes were retirements and some can be chalked up to bad personal behavior, disruption has played a part in some executive changes.
“While the job market is strong, with low unemployment and strong hiring numbers, the stock market is in near-constant flux; trade concerns loom in many industries, including manufacturing and technology; and the regulatory environment may change,” said Andrew Challenger, vice president of Challenger, Gray & Christmas, Inc.
“Boards are anticipating a changing environment and putting leadership in place who are capable of succeeding in it,” he added.
“The message from boards of directors is loud and clear: help us evolve, or we’ll find someone who will,” writes CB Insights. “The past few decades are filled with stories of CEOs who stepped up to the plate, only to realize that their opponents were playing a different game entirely.”
To this end, CB Insight’s report “Personally Disrupted: 14 CEOs Who Got Axed After Failing To Navigate Disruption,” took a look at 14 such stories at major U.S. companies, from the Blockbuster exec who passed on acquiring Netflix, to the J. Crew fashion icon who missed out majorly on e-commerce, to the Barnes & Noble CEOs who steered the bookseller’s focus everywhere but on actually selling books.
Recent Retail & Consumer Goods CEO Changes
Steve Stagner, Mattress Firm, 2019
Between 2013 and 2018, Mattress Firm grew from 700 to 3,500 locations. In October 2018, it filed for Chapter 11 bankruptcy and in April 2019 CEO Steve Stagner resigned.
Stagner oversaw the company’s rapid expansion and resigned as CEO In March 2016 but remained chairman. He was reappointed CEO in March 2018. Mattress Firm emerged from bankruptcy in November 2019, with a plan that would leave it about 2,500 locations, down from approximately 3,500.
If Mattress Firm’s rapid expansion reflected confidence that the mattress industry would prove immune to e-commerce’s disruptive forces, that confidence was misplaced, CB Insights notes. Online mattress retailers, including Casper, emerged, deliver savings and convenience. Amazon also released a memory foam mattress under its AmazonBasics line.
“I believe now is the right time to leave Mattress Firm and make way for fresh leadership because I am confident in the Board’s expertise and strong business foundation,” Stagner said in a statement when he stepped down.
Jan Singer, Victoria’s Secret, 2018
Victoria’s Secret’s problems predated CEO Jan Singer. While parent company L Brands’ stock hit an all-time high of close to $100 per share at the end of 2015, it had lost a quarter of that value by the time Singer came aboard in September 2016, according to CB Insights. Singer was brought on to seek out new customers and better understand what it was that customers were looking for.
However, Victoria’s Secret steered into ulta-sexy as competitive startups like ThirdLove emerged, focusing on comfort and positive body images.
Singer’s departure as CEO of Victoria’s Secret was announced in November 2018 and the retailer still faces challenges. This year the company has announced plans to close 53 Victoria’s Secret locations.
“Given the decline in performance at Victoria’s Secret, we have substantially pulled back on capital investment in that business versus our history,’’ L Brands said in written earnings commentary.
Camillo Pane, Coty, 2018
When Camillo Pane took the CEO job, Coty had just agreed a deal with Procter & Gamble to acquire more than 40 of its beauty brands and one of Pane’s priorities as CEO was to integrate the new brands.
His efforts proved unsuccessful — Coty stock lost more than half its value from the time that the P&G acquisition was closed in 2016 to Pane’s departure in 2018, according to CB Insights. Attempting to explain the company’s struggles a few months before his departure, Pane pointed to e-commerce.
“E-commerce is slowing traffic and consumers are looking for more of an experience. You see a trade-up to prestige and specialty,” Pane said in an interview. “This is something I’m not sure people were expecting, but it is the reality.”
Margo Georgiadis, Mattel, 2018
Margo Georgiadis left Mattel to take up the top job at Ancestry.com. However, Mattel’s stock took a 50% hit during Georgiadis’s tenure, according to CB Insights, and the toy company had been getting pinched by the struggles of Toys “R” Us, its primary distribution partner, even before she took the job.
Georgiadis was brought in for her tech credentials, but Mattel’s $2.9B debt load curbed her ambitious plans by making it more difficult for the company to invest effectively in e-commerce.
Mickey Drexler, J. Crew, 2017
By 2017, sales at J. Crew Group stores had fallen for ten consecutive quarters, and “the brand was struggling to stay competitive in a retail landscape that had been transformed by a trifecta of disruptive forces: e-commerce, fast fashion, and social media,” CB Insights notes.
Affordable e-commerce fashion fit for fast-paced social media proved difficult for J. Crew’s high-end prices to compete with. Drexler himself admitted to harboring regrets about how he underestimated the impact that tech would have on the fashion industry.
“I’ve never seen the speed of change as it is today,” he said in an interview. “If I could go back ten years, I might have done some things earlier.”
Drexler stepped down as CEO in 2017 after 14 years. He retained his position as chairman of the board and oversaw the transition to the new CEO, Jim Brett. Brett left the company in 2018. Reports said Brett was forced out over disagreements with the board on strategy. In May 2019, J. Crew announced the closing of about twenty of its retail stores and in July 2019 the retailer appointed Billy May as its new chief customer officer for the J.Crew Brand, reporting to Interim CEO Michael J. Nicholson.