Ralph Lauren president and chief executive Stefan Larsson is to leave the company in May, after a dispute with founder Ralph Lauren on the future direction of the business.
Lauren said: “Stefan and I share a love and respect for the DNA of this great brand, and we both recognise the need to evolve. However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business.
“After many conversations with one another, and our board of directors, we have agreed to part ways. I am grateful for what Stefan has contributed during his time with us, setting us in the right direction with the Way Forward Plan.”
The firm is searching for a new chief executive and will be led by chief financial officer Jane Nielsen until a replacement is appointed.
Larsson became chief executive at Ralph Lauren in September 2015, taking the helm from Lauren, who became executive chairman and chief creative officer. He was previously global president at Gap’s budget brand Old Navy from 2012, and spent 15 years at H&M.
Lauren said the business is committed to the Way Forward Plan, announced in June last year, and it will continue as agreed. It includes strengthening the team, evolving the products and marketing, improving operations and reducing costs.
Larsson added: “In June, we announced a plan to refocus the company on what made it iconic, evolve that for today and build our brand to its full potential. That plan is on track – I am proud of the progress the whole team has made and I am committed to ensuring its uninterrupted execution. Ralph will always be an inspiration to me, and I am grateful to have had this experience.”
It comes as Ralph Lauren’s third quarter sales dropped by 12% to $1.7bn (£1.3bn) compared with the same period last year, driven by a decline of 15% in North American sales and 6% internationally.
Wholesale sales fell by 26% to $586m (£466m) as the company shifted its deliveries to adjust to lower demand and prevent excess inventory, while retail revenue fell 2% to $1.1bn (£0.9bn). Licensing revenue also fell 4% to $44m (£35m).
The so-called Way Forward Plan includes refocusing core products, cutting lead times and aligning supply with demand. During the third quarter, the firm lowered inventory levels by 23% and reduced spring 17 SKUs by more than 20%.
Neil Saunders, managing director of research firm Global Data Retail (formerly Conlumino), said Larsson’s departure signals “a brand in crisis” and highlights the founder’s dominance over the business.
“That Ralph Lauren is lost is evident from our own consumer data which shows, over the past two years, a steady decline in the number of shoppers considering it and buying from it,” he said. “The same data also show that the brand has lost some of its cachet, especially with younger shoppers.”
He said Ralph Lauren has made some progress and believes the direction in which it is moving to be broadly sensible.
“However, execution has been extremely poor, and will not be improved by management squabbling or the absence of key executives. As such, the year ahead is likely to be another one of treading water rather than of significant progress,” he added.