mytheresa CEO Michael Kliger wants to make one thing clear: He’s not vying for the title of “ideal CEO.”
Not that I doubt he’s good at his job: Under his leadership, the German luxury e-retailer has seen impressive growth, finishing the most recent quarter in double digits year-over-year. revenue gains even when some of your competitors have had problems.
But Kliger doesn’t believe there is such a thing as the perfect leader. Like the lingering uncertainty that has come to define retail since the pandemic, the most relevant skill sets for today’s fashion C-suite are constantly in flux, he said.
“There are great people at the right time and a lot of great people at the wrong time,” Kliger said.
As for right now: The pandemic is almost in the rearview mirror, and a recession is potentially on the horizon. Where, when and how most people work has fundamentally changed in many industries, and in fashion, the rapidly evolving conversations around sustainability, diversity, supply chain and digital transformation are having an unexpected impact on business outcomes. Meanwhile, the looming economic downturn could serve as a fitting litmus test to reveal the strengths and shortcomings of many top executives and the companies they lead.
There may not be a single leader for all fashion companies, but boards are pondering the question: who is best equipped to lead our company right now? Often, it is not the current CEO. Last year, The Gap, MatchesFashion, Lyst and others lost their top executive, and earlier this year, Victoria’s Secret and Stitch Fix announced the departure of their CEOs. Several fashion houses, including The Gap, Kohl’s, The RealReal and VF Corp., entered 2023 without a permanent leader.
The turmoil at the top is an excellent opportunity to reshape the profile of the fashion CEO and broaden the skills and experience of industry leaders beyond more traditional avenues. Until now, many of the industry’s CEOs have spent the majority of their careers in retail sectors such as fashion and beauty, and the go-to-market, operations, finance, and marketing routes remain popular routes to the C-suite. .
“There was a time when if you had good merchandising, good branding and a decent experience in store, or online, you’d be fine,” said Garrett Sheridan, CEO of Lotis Blue Consulting. “But now we are faced with greater complexity. The role of the CEO … is fundamentally changing.”
New Retail, New Playbook
More than ever, fashion leaders must be agile and flexible, have strong change management skills, the ability to create compelling narratives for their customers and employees, and respond quickly and innovatively in a highly digital world.
Some fashion firms are shifting from the “merchant king and queen” leadership profile and selecting their C-suite leaders from consumer packaged goods companies, the hospitality and technology industries, and from previously administrative functions such as resources. human resources and supply chain, Kyle said. Rudy, Senior Partner at Kirk Palmer Associates.
Last month, sportswear brand Under Armor named Stephanie Linnartz, president of the Marriott International hotel chain, to its top job. Around this same time last year, Chanel appointed Leena Nair, then Unilever’s director of human resources.
Even as CEOs “grow up” in the industry (Calvin Klein, Sephora, and Foot Locker all recently selected their new fashion or beauty bosses), the paths many leaders are taking to get to the top are becoming less traditional. . Their resumes are based on skills and experiences that weren’t considered critical in previous years, Rudy said.
“Today, you’re going to see more CEOs with a greater focus on international experiences somewhere in their experience,” Rudy said, pointing to Calvin Klein’s global brand president, Eva Serrano, former president of Calvin Klein’s Greater China business. Inditex, as a recent example.
There is still room for leaders with more linear business paths to find success in retail, but they will need to be progressive and flexible, as well as build strong teams in areas such as design, diversity, sustainability and technological innovation, say the experts.
At J.Crew, CEO Libby Wadle, whose resume includes merchandising leadership roles at Coach and The Gap, credits her “commercial roots” with helping her respond to the ever-changing demands of the company’s consumers and employees. brand in the last two years, which include orchestrating the heritage American label change effortswhich have recently begun to bear fruit.
Wadle’s strategy, which included a revamped men’s design team under Supreme alumnus Brendon Babenzien, has been widely seen as one that draws on the practicalities of traditional retail.
“A fundamental and critical part of being a great merchant is listening to signals from your customers,” he said. “I think it’s the same [true] to [company’s] culture and people. First I am a listener. I don’t like being the smartest person at the table, or on Zoom for that matter.”
A recession opportunity?
If the predicted economic downturn materializes in 2023, CEOs will have to make tough decisions about layoffs, store closures and more.
In general, however, the most successful executives will resist the temptation to focus all their attention and planning around temporary economic changes and instead maintain a long-term perspective and, where possible, continue to invest in areas such as Talent development and company culture. said Maju Kuruvilla, CEO of Bolt, a fintech company that works with fashion brands like Revolve, Forever 21 and Badgley Mischka.
“History has taught us that whenever there are recessions like this, that’s when the best companies are built,” he said. “But you have to invest in your people, become very close to your customers… and remove any latency from your processes.”
Mytheresa’s Kliger said he expects 2023 to require a “constant reallocation of resources,” meaning it will need to be prepared to change priorities on the fly. But for now, he plans to focus on “regional growth opportunities” in the US and China; “operational excellence”, which includes the recruitment and development of talent; and deepen clientelization.
While companies shouldn’t hire leaders solely for their ability to execute layoffs and layoffs, given that it’s been more than a decade since the last great recession, having some memory of what that’s like can be helpful, experts say.
“This is a time when experience helps…there is a generation of young business leaders who have no experience of what a recession is or isn’t. Age is not always a benefit. But sometimes it is,” Kliger said.
J.Crew’s Wadle is also drawing on her 18 years of experience (she was president of the J.Crew brand during the 2009 recession) to help steer the company through what she calls “another time of uncertainty.”
The goal, he said, is to keep the emphasis on the product and “lead with creativity” while responding quickly to consumer changes.
“I’ve been through some of these moments,” he said. “We need to stay really focused on what we’re building. It’s very easy to get distracted by a headline a day.”