Said another source, “There was never a clear vision from the day he became ceo. Being a good merchant doesn’t mean you’re going to be good ceo.”
Others, however, defended Kahn, noting that he did make several bold moves while in command. Marshall Field’s was bought for $3.24 billion from Target Corp. last summer, and the company dove headfirst into the bridal and formal wear arena purchasing David’s Bridal, After Hours Formalwear and Priscilla of Boston. He also overhauled and intensified the private label program with new labels, although the performance there hasn’t been the best, and decided to shut down 32 underperforming Lord & Taylor stores, or about a third of that division.
“This was a shocker. It all came down at a regularly scheduled board meeting [on Friday]. I think Gene was blindsided,” said another executive familiar with May, who noted that Kahn’s recent actions suggest he was not expecting what would happen, considering he was planning aggressively for the year ahead and ready to make some key appointments in the marketing and merchandising areas, to strengthen product and branding strategies.
There’s further speculation that more information about the depth of May’s sinking performance came to light last week at the board meeting, prompting the board to ask Kahn to resign. Net profits at the $13.34 billion, 500 department store operation have been shrinking steadily over the last few years, from $927 million in 1999 to $434 million last year.
Weinswig at Citigroup Smith Barney characterized Kahn’s departure as part of the wave of changes sweeping through May that should bring a brighter future. She said Lord & Taylor has spent the last 18 months changing 60 percent of its merchandise and has been driving positive same-store sales, though the corporation as a whole has been running in the negatives. She also noted that May in the last month placed Steven Nevill, formerly with Kurt Salmon Associates, as senior vice president for inventory management, a new position, and created a planner-allocator structure.