2022 was a big year for CEO departures in retail. Bed Bath & Beyond, Gap, Glossier, Bonobos and more saw their top executives leave as the businesses changed or struggled to compete. That means there are also a lot of open positions in the industry.
E-commerce company Wish announced CEO Vijay Talwar was leaving in September and still has not named a permanent replacement. In early December, VF Corp. CEO Steve Rendle retired from his post, leaving that retailer on the hunt for a permanent replacement. The new year has not been any slower: Already, Stitch Fix’s CEO has stepped down amid job cuts and Rite Aid’s CEO has exited.
According to executive search company Heidrick & Struggles, there were 11 CEO departures at retail companies in the Fortune 1000 in 2022, the majority (eight) of which were in the Fortune 500. That was consistent with the past two years, where 10 and nine executives, respectively, left their companies and is lower than 2019’s total (14). 2023 could be an even bigger year, according to Catherine Lepard, a partner at Heidrick & Struggles and a managing partner of the company’s retail and direct-to-consumer practice.
“Looking ahead to 2023, we can expect to see continued and potentially accelerated executive turnover within the retail space. In particular, we’re anticipating that Q1 and Q2 will be the choppiest due to inflation and the slowing economy,” Lepard said in emailed comments. “Consumers are shifting their spending behaviors and trading down to private or value brands, focusing on essentials and veering away from big ticket items. It will continue to be challenging for retailers to beat the prior year’s sales performance.”
Top executives taking the reins in 2023 are entering a tough environment still defined by inflation and consumer behavior changes, with the threat of a recession looming over the industry. Fitch analysts earlier this year said 2023 could be yet another year where the strong get stronger and the weak get weaker. And while default rates might stay relatively low in retail, the bankruptcy of Party City has already set a dark tone for retailers on the brink.
Bed Bath & Beyond CEO Sue Gove, who became a permanent member of the team in October, and whoever replaces Heyward Donigan at Rite Aid, have their work cut out for them. Both retailers have been cited as a bankruptcy risk as they struggle to hang on financially. But retailers across the board are facing challenges.
A recent Challenger, Gray & Christmas report found that 100 CEOs across industries left their jobs in December, an increase from 95 in November. The yearly total for 2022 is lower than last year, but in retail, the number has stayed relatively steady. Where in 2021, 23 CEOs left their posts, that number was 21 last year.
Layoffs in retail have been rampant, both last year and into the new year, and new CEOs will have to navigate through existing company challenges and whatever macroeconomic conditions the industry could face in 2023.
Here are some of the retailers that have new leadership going into the new year, and what to watch for.
Puma’s former CEO Bjørn Gulden just took the reins at competitor Adidas on Jan. 1. Adidas said over the summer that Kasper Rørsted would exit the top post at the company sometime in 2023, but the executive actually left Nov. 11, with the retailer’s chief financial officer leading in the short interim period.
Gulden’s first month at the company has already been somewhat eventful, with a fake press release circulating that said Adidas had named a co-CEO to ensure ethical manufacturing. That is far from the only challenge Gulden will face at the athletics retailer. The company is coming off of a recent break up with Kanye West, also known as Ye, and has said it will continue to sell Yeezy products without the brand name attached, which could be received poorly by customers.
Adidas also spent the end of 2022 slashing its guidance and has failed to keep up with the robust growth at Nike. The executive already has some experience at Adidas, having worked at the company in the ’90s, and analysts praised him for his success reinvigorating the (much smaller) Puma brand.
Just before the appointment was officially announced, Wedbush analysts said Gulden was “one of the best hires they could make” and praised his deep athletic experience. The analysts also noted Gulden could potentially return the retailer to a more exciting product lineup, having executed on a host of high-profile collaborations at Puma.
“While [Rørsted] has had some notable wins during his tenure (strong digital growth, the well-executed sale of Reebok), there’s also been a notable lack of product-related…
Read More: 5 CEOs to watch in 2023