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Is it possible to find all these qualities in one person? Maybe not, but given some of the toughest retail conditions in years, the sluggish economy and the threat of war, some retailers certainly hope so. From Wet Seal to Gap, Parisian to Ann Taylor, executives once thought capable have been shown the door and new ones have been brought in to work their magic. The problem is, there is a shrinking pool of magicians.
The task is more challenging than ever as business pressures increase daily along with complexity. Logistics, merchandising, marketing, human resources, property and, in some cases, global expansion are just a few of the balls a retail chief executive officer has to juggle these days — not to mention satisfying the increasingly impatient Wall Street. Where once a ceo could grow into his or her role — in many cases working their way up through the executive ranks — and gradually mold the business into their vision, these days a few bad quarters can mean they’re out and another executive is in.
The ceo criteria has shifted. For today’s ceo, a track record of problem-solving and experience, preferably as a merchant, count the most.
"The day of nonretailers running major retail companies has passed," said Robert Kerson, managing director of the global retail practice of Korn/Ferry executive search. "The most important trait you need to have is retail experience. That sounds simplistic, but too many don’t have it.
"Look at the major retailers who are fighting survival battles. They’re basically companies being run by people without true retail experience. Good management skills from one industry don’t easily translate to retail, where you have to have a long-term strategy, which has got to be tweaked and changed rapidly because the competition is so much keener and always changing. You’ve got to be able to face competition on a daily basis."
Yet several big retailers with serious issues, such as Sears, Roebuck & Co., Gap Inc., Sam’s Club, Ann Taylor Stores Corp. and Kmart Corp., have opted for ceo’s who are financial or operations executives at heart, to restructure the business, clean up the balance sheet and hopefully, redirect the stores and merchandise.