Ralph Lauren Corp. is betting again on an outsider to run the company, this time tapping Procter & Gamble Co.'s top beauty executive to be its next chief.
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The company said Wednesday that Patrice Louvet will become president and chief executive officer on July 17. He is also joining the company's board and will report to executive chairman and founder Ralph Lauren.
Mr. Louvet, 52 years old, is the second external pick to lead the company after Mr. Lauren stepped aside as chief executive in 2015. The designer-founder, whose family remains the company's largest shareholder, maintained titles as executive chairman and chief creative officer.
Stefan Larsson, who had been named Mr. Lauren's successor after spending time at Gap Inc. and Hennes & Mauritz AB, left the company after less than two years at the helm after clashes with Mr. Lauren over creative control. Mr. Lauren founded the fashion label in 1967.
Mr. Louvet is group president of global beauty at P&G, a division with brands such as Head & Shoulders, Olay and Old Spice. The company's 12 brands generated about $11.5 billion in revenue in 2016.
Mr. Louvet, a 28-year P&G veteran, had been among the executives seen as a potential successor to Chief Executive David Taylor. Born in St. Cloud, France, Mr. Louvet spent many years managing beauty and hair-care brands until becoming president of global shave care, one of P&G's core divisions, in 2011. He took over P&G's beauty business in 2015 shortly before the company sold a chunk of the portfolio to Coty Inc. for $11.6 billion.
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The sale left Mr. Louvet in charge of a much smaller business that includes brands such as Olay, Pantene and Old Spice. The division, which generated about $11.5 billion in revenue in 2016, has continued to struggle amid sluggish overall sales at P&G. Olay and other mass-market brands have lagged while SK-II cosmetics, one of the company's few remaining luxury brands, is one of its bright spots.
P&G said Wednesday it will name a new head of its beauty division at a later date.
Unlike Mr. Larsson, Mr. Louvet doesn't have a fashion apparel background, which means he is less likely to clash with Mr. Lauren over design issues. But Citi analyst Kate McShane questioned whether he is "the right fit to manage significant secular shifts in the apparel/retail environment."
Mr. Louvet previously showed up on lists of possible CEO contenders for other companies, said a recruiter who wasn't involved in the search. The executive was willing to leave P&G partly because his preference to live in the New York area where his children attend a French language school, this recruiter said.
As a signing bonus, Mr. Louvet will receive $3.4 million in cash plus a one-time equity award worth about $9.2 million in restricted stock and performance based shares. He will also receive an annual equity award with a target value of $7.5 million. Mr. Louvet will receive a base salary of $1.25 million and an annual bonus with a target of $3.75 million, according to a company filing.
"He's an enormously skilled business leader with a deep passion for the consumer and a sophisticated understanding of building global brands," Mr. Lauren said in a statement.
The new CEO announcement comes one day before Ralph Lauren is slated to report its fourth quarter and full-year financial results. Analysts expect the company to report a quarterly decline in adjusted earnings and a 17% fall in revenue, according to Thomson Reuters.
Mr. Louvet will take the reins at Ralph Lauren one year after the announcement of a restructuring plan aimed at cutting costs by closing underperforming stores, reducing staff to help streamline the organization and increasing its speed in bringing products to market.
Earlier this year, the company said the plan has resulted in about $400 million of restructuring charges and $150 million of inventory write-downs and severance payments to Mr. Larsson.
Shares of Ralph Lauren declined 1.4% to $72.92 in afternoon trading.
Sharon Terlep and Joann S. Lublin contributed to this article
Write to Bowdeya Tweh at Bowdeya.Tweh@wsj.com
(END) Dow Jones Newswires
May 17, 2017 12:47 ET (16:47 GMT)