Feb 23, 2017 07:20 AM EST
Ralph Lauren chief executive, Stefan Larsson, will step down in May, according to a statement released by the company.
Larsson will step down and leave the struggling luxury fashion brand after failing to see eye to eye with the company's founder, namesake and chairman. There was also an evident drop in sales that Larsson has been unable to fix.
Ralph Lauren's shares fell nearly 12 percent in early trading on the news although its quarterly earnings topped Wall Street's forecasts. However, sales continue to plunge.
Stefan Larsson was the head of Gap's Old Navy Unit until he left in 2015 to become CEO of Ralph Lauren. The move was a disappointment for Gap since Old Navy was one of its divisions that did well.
Ralph Lauren Investors, on the other hand, were thrilled as they believed that with Larsson on the helm, Lauren would focus more on design and the company's long-term plans. Unfortunately, that was short-lived as Ralph Lauren, himself, announced Larsson will leave the company by May. In a press release statement on Feb. 2, Ralph Lauren disclosed irreconcilable differences in running the company as the reason for Larsson's eventual departure.
"Stefan and I share a love and respect for the DNA of this great brand, and we both recognize the need to evolve," Ralph Lauren said. "However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business." He was still grateful for Larsson's contribution with the Way Forward Plan. As part of its implementation, the company planned to close 50 stores and lay off eight percent of its employees.
At the time, Lauren was, in fact, supportive of Larsson's vision. But something might have happened that changed his mind. Meanwhile, Ralph Lauren Corporation promised to continue the plan under Jane Nielsen's leadership until a new CEO joins. Larsson also expressed his gratitude to the company and vowed not to interrupt the execution of its plans in the future.
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