After several months of searching Ralph Lauren has found a new CEO: Patrice Louvet, formerly of Procter & Gamble’s beauty division.
Writes New York Magazine:
Louvet, who will start on July 17, comes from Procter & Gamble’s global beauty business. He will report to Ralph Lauren, who said in a statement, “Finding the right partner to work with me to take us forward in our evolution has been my primary focus over the last several months and I am thrilled that Patrice is joining our talented team.”
The past two appointments for Ralph Lauren CEO come from outside of fellow luxury brands. But in over 25 years at P&G, Louvet has overseen the beauty division, grooming division, and prestige division, which includes lines from Gucci and Hugo Boss.
Ralph Lauren has been in the middle of its “Way Forward Plan” turnaround campaign for the past several years. The plan includes focusing on e-commerce, shutting down its Polo flagship store, and developing new store formats such as a café-bookstore hybrid.
And Bloomberg reports:
The pick failed to comfort Wall Street. The shares fell as much as 3.3 percent to $71.51 in New York trading Wednesday, reaching its lowest level since July 2010. The stock had already declined 18 percent this year through Tuesday’s close.
The tepid reception could mean that “investors expected someone with a slightly different professional background, and more meaningful track record in apparel and the fashion industry,” said Chen Grazutis, an analyst at Bloomberg Intelligence. “That doesn’t mean he can’t be very successful in this role.”
Ralph Lauren has been seeking a new CEO since the abrupt announcement in February that Larsson was leaving. Chief Financial Officer Jane Nielsen served as interim chief during the search.
Louvet is getting a big raise after his P&G job. He’ll collect a $1.25 million annual salary, according to a regulatory filing. Louvet also is eligible for a yearly target bonus of $3.75 million and equity grants worth $7.5 million, both depending on company performance.
The target package is more than twice as high as what he received in his last full year at P&G.
Louvet will also get sign-on awards worth about $12.6 million this year, including $3.38 million in cash. The remainder comes in shares, of which $6.59 million vest if the company achieves certain financial goals and $2.6 million vest after five years regardless of performance. His contract also gives him a $30,000 allowance to pay for his children’s schooling and six weeks of vacation.
Best of luck to Mr. Louvet, Mr. Lauren, and this great American brand. — CC