From Calvin Klein to American Apparel, some leadership transitions have gone smoother than others
When Bobbi Brown founded her eponymous cosmetics line in 1991, her less-is-more mentality was welcome counter programming to the ostentatiousness of the early 90’s. Now, 25 years later, Brown’s “be who you are” mantra has become de rigueur. Her products grace the beauty cabinets of public figures from Kate Middleton to Michelle Obama.
Brown joins a storied list of brands ranging from Saint Laurent Paris to Jil Sander that have to deal with the departure of their founding creative force. This week, The Estée Lauder Companies Inc., which acquired Bobbi Brown Professional Cosmetics in 1995, announced that that Brown, founder and chief creative officer, would be leaving to pursue new ventures.
Not just a cult favorite, Bobbi Brown is a sales behemoth, too. Research firm Euromonitor International estimates that the brand sold $238.9 million of color cosmetics in the U.S. in 2015, an increase of 45% from five years ago that made Bobbi Brown the 14th largest brand in that category. It’s a “growth driver and a pretty significant chunk of the Lauder beauty empire,” said Euromonitor research analyst Eleanor Dwyer.
So what’s next? A Lauder spokeswoman declined to provide executives for comment. Still, a study of fashion houses that thrived or floundered after their founding creative forces left provides a glimpse of the possibilities and pitfalls ahead.
Here are three lessons that fashion and beauty bosses can learn from past creative transitions:
If it ain’t broke, don’t fix it: If a brand has a coherent identity that’s popular with consumers, don’t change it around too much. Calvin Klein, whose founder left in 2006, is often cited as a good example. Despite some minor hiccups, Calvin Klein has grown exponentially since its 2002 acquisition by PVH Corp. In 2015, Calvin Klein did $8.2 billion in global retail sales, with earnings before interest and tax up 19% on the previous fiscal year.
This is partially down to the classic, simple aesthetic that Klein imbued in his namesake brand, which retails boxer shorts, jeans and coats. PVH also kept much of the design team that Klein had handpicked until this year, when the equally unfussy Belgian designer Raf Simons took over as chief creative officer.
Maintain cordial ties: Dov Charney’s tiff with American Apparel is the most famous recent dispute between a departed founder and his company. Charney, who has faced allegations of misconduct, was removed as chief executive in 2014. Since then, lawsuits have been filed for defamation and breach of contract, and the company received a temporary restraining order preventing Charney from disparaging the company and attempting to shuffle the board of directors. In the intervening period, American Apparel has been delisted from the New York Stock Exchange and in November, filed for bankruptcy again. This week, a judge approved liquidation plans. (Charney has repeatedly denied all allegations of misconduct.)
Replace carefully: In 2000, much of Jil Sanders’ design staff reportedly left with the queen of minimalistic fashion when Sanders quit months after selling a controlling stake to Prada S.p.A. The following collections were viewed as mediocre and the previously profitable brand reported losses in 2001 and 2002. Sander has since returned and quit the label twice.
Same goes for Donna Karan. Karan’s creative heirs—she left the company in 2015—Dao-Yi Chow and Maxwell Osborne are known for their streetwear-influenced designs, where Karan’s customers came to her for simple yet sophisticated wardrobe essentials. LVMH Moët Hennessy Louis Vuitton SE gave up its longtime efforts to transform Donna Karan International this year, selling it to G-III apparel for $650 million. Chow and Osborne have since left.
The vagaries of the fashion world mean that creative heads seemingly change every other season, but longevity is not unheard of. After the decade of decline that followed the death of Coco Chanel, her fashion house appointed Karl Lagerfeld its creative director in 1983. Thirty three years later, he’s still captain of the ship.
This story was originally published on MarketWatch.
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