the Insiders


November 23, 2011 11:49 AM


David Dyer and the Truth

David Dyer, president and chief executive officer of Chico's FAS Inc. did a rather shocking thing yesterday: He told an unadorned and uncomfortable truth....

David Dyer, president and chief executive officer of Chico's FAS Inc. did a rather shocking thing yesterday: He told an unadorned and uncomfortable truth.

david-dyer.jpgHe should get high marks for that, but we also need to acknowledge that when it comes to frankness from the corner office, we grade on a serious curve.

Chico's namesake brand was on a roll in July and August with double-digit comparable-store sales increases. Dyer saw an opportunity and bet big, loading up on goods for the third-quarter.

"We were really coming off some very, very strong momentum and, honestly, I took a shot," Dyer told Wall Street analysts on a conference call. "We went for the inventory. We thought that we could continue that momentum, and it didn't happen."

Later, he added, "I was wrong. And so we move on."

Net profits sank 8.2 percent, the firm missed Wall Street estimates and the stock dropped 14.4 percent. Dyer's stock, on some level, seemed to rise.

Analysts grilled the ceo on the call, but also noted his forthrightness. Consultant Marni Shapiro, co-founder of The Retail Tracer, told the ceo his approach was "refreshing...kudos to you. This is retail. People make mistakes."

I agree completely, and I give the ceo full credit for taking the bull by the horns. I give him even more credit for admitting that he was doubling down and taking the same bet on the on-the-rise White House|Black Market division. "Fashion businesses are not for the faint of heart," he said.

But let's not confuse doing one's job with leaping tall buildings in a single bound.

I'm sure Dyer wants his subordinates to be frank and honest with him. It's only fitting that he act the same with his bosses -- the company's shareholders.

Dyer stood out on Tuesday's call not so much for his constitutional fortitude, but because he largely stood alone.

The impulse of so many top executives in fashion is to make excuses for failures, to point to the weather or a calendar shift when sales are bad, to preen excessively with adjusted pro-forma profits before taxes as net losses pile up.

They're smart people and I don't think dishonest. I think they see all the shucking and jiving as part of the game they have to play as high-powered, highly compensated ceo's. Thing is, it's not so much of a game to everyone else.
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