Companies trust their CEOs too much, having access to every point of the business but when is it too much?
The retail and fashion industry have been in shambles since 2000 reared its head and millenials became the most dominant shoppers.
To be fair, the problems are not with the changing consumer, its with the companies themselves.
Roberto Cavalli and Charolette Russe both closed this weekend but Roberto Cavalli was the biggest surprise because it was unexpected.
Roberto Cavalli’s rash decision to close all US stores and give only a week’s paycheck to his 93 employees says he knew little about what was happening in his own company and in fact relied on another to pull profit where he was just the face and designer (did he or was the clothes manufactured?).
And the corporate branch knew March 22 while employees were taken by surprise and escorted out by security!!
This is problem facing the fashion industry, too many collections based on too many trends…Do you need those 7 collections a year..or just 1 collection that spands all 2 seasons (basically cold and hot).
So why did he fail? Why is Gucci and Fendi the only Italian brands not fazed?
Cavalli only owns 10% of his namesake brand meaning he had little say in its direction. In 2015, he sold 90% to a private equity firm a mistake we see often…Toys R Us, Radio Shack and so many companies are using them as investors but as soon as the profit sinks, they are quick to file for bankruptcy.
Secondly, Cavalli was no longer designing…he resigned 4 years ago…and Peter Dunas took over for 19 months and then Paul Surridge…who resigned a week before the brand collapsed.
How could you sell your namesake brand and then someone else design for it? No wonder the pieces became so gaudy and unoriginal.
If you have any more info on this saga, comment below…
Happy April’s Fool’s day 💋