American designer Ralph Lauren said he is stepping down as chief executive and named the head of Gap Inc.’s populist Old Navy brand to the position.
Ralph Lauren Corp., founded by 75-year-old Lauren in 1967, appointed Stefan Larsson, the global president of Gap’s Old Navy division, as CEO effective in November, Reuters reported, citing a company statement.
Lauren will continue to serve as executive chairman and head its design team, the company said.
Lauren, who built a fashion powerhouse on luxury designs inspired by country club chic, plans to stay active at the company and Larsson will report to him.
“When they start designing things I can’t understand, I’ll quit,” Lauren told the New York Times in an interview.
The company has been struggling to boost profits as a stronger dollar reduces the value of sales from overseas. Net revenue in its first quarter ended June 27 fell 5 percent, mainly due to currency effects.
Odeon Capital analyst Rick Snyder said the company had grown to a size where it needed more “systems and controls”. The change in CEO “is just a natural progression,” Snyder said.
Milton Pedraza, a fashion industry analyst at the Luxury Institute, said Larsson’s appointment follows a trend of luxury brands hiring leaders from mass-market companies in recent months.
He cited the appointment of Grita Loebsack, a former vice president at Unilever Plc., as CEO of Kering’s emerging brands, which include Stella McCartney and Gucci.
Larsson is credited with reviving sales at the Old Navy division, successfully implementing a model of offering trendy clothes at low prices.
Annual sales at the business rose 8 percent in 2014 and became Gap’s biggest business. Sales for the division were US$6.62 billion, or 40.3 percent of Gap’s total.
Lauren’s fashion empire includes some 25 brands including the Polo, Club Monaco and Denim & Supply, and the company makes clothing, accessories, furniture, home decor items and footwear under its labels.
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