Kenneth Cole CEO out as 4Q loss shrinks

Kenneth Cole, left, and outgoing Chief Executive Jill Granoff.

By Adrianne Pasquarelli - Crains New York Business

  Jill Granoff, the chief executive of Kenneth Cole Productions Inc. for the last three years, is leaving the firm in a mutual decision; retailer continues to close slower stores.

In a move that surprised many in the retail industry, Jill Granoff, chief executive of Kenneth Cole Productions Inc., announced her resignation on Monday. Ms. Granoff had only been with the footwear and apparel company for three years.

The move is effective immediately. Designer Kenneth Cole, who founded the firm in 1982, will take on Ms. Granoff’s duties temporarily as the search for a new CEO begins. The firm has also brought on Paul Blum, a 15-year veteran at Kenneth Cole who served as president from 2002 through 2006, as vice chairman. Mr. Blum most recently helmed jewelry company David Yurman, until his resignation last year.

“Over the past three years, I've worked with a great team on a great brand,” said Ms. Granoff, in a statement. “Despite a challenging business environment, together we have been able to build a more productive organization that is well positioned for the future.”

In a statement, the company described the decision to find a new CEO as "mutual."

Ms. Granoff, a Long Island native who spent nearly two years overseeing Liz Claiborne’s Juicy Couture and Lucky fashion lines before joining Kenneth Cole in 2008, had a contract that did not expire until spring of 2012, according to the company’s 2009 proxy statement, the most recent available. In the event of a resignation, her separation agreement includes a continuation of her $1 million base salary for 18 months, a lump sum payment equal to her target bonus for the year prior to her termination, and a pro-rata cash bonus paid this year. In 2009, Ms. Granoff received a total salary of $1.6 million.

Investors reacted strongly to Monday’s announcement. Kenneth Cole’s share price plummeted 11% to trade near $12.45 by midday.

Industry experts were upset by the move, since the company had finally begun to gain traction on a long and grueling turnaround that was hampered by the recession. Last month, Ms. Granoff announced the company would be closing nine unprofitable stores, including the 17,000-square-foot Rockefeller Center flagship.


Also on Monday, Kenneth Cole announced fourth-quarter results—revenue was up 10% to $107.9 million for the quarter ending Dec. 31, though the company did suffer a $2.7 million loss. Revenue for the year increased to $411.7 million from $371 million in 2009.

“She seemed to have attacked the right issues,” said Jeff Edelman, director of retail and consumer products advisory services at RSM McGladrey. “She was making progress, obviously she and others in the company didn’t see eye to eye, and my guess is the company is going to be sidetracked for a while.”

Some retail sources believe Ms. Granoff’s resignation was propelled by a personality clash with Mr. Cole, who is notorious in the industry as a micromanager who is difficult to work with.

However, in an interview with Crain’s earlier this year, Ms. Granoff, who has experience with brand founders from her time at Liz, said the partnership had been working out. “He’s obviously a strategic, visionary, brilliant marketer, and I think I bring the business strengths to move the business forward,” she said. “We have a lot of potential ahead.”