The CFO’s Expanding Role
Strategist, adviser, communicator, futurist: Retail chief financial officers have seen their role broaden so much in recent years that, in some cases, they have become virtual partners with the CEO. Once responsible primarily for financial stewardship, the CFO is embracing a growing number of additional roles encompassing strategic planning, technology and perhaps even a bit of crystal ball gazing. Some are even taking on COO functions.
One thing is certain: CFOs are not just number crunchers any more.
“The old chief financial officer was primarily the guy with the numbers,” said Al Ferrara, a partner and leader of the retail and consumer products practice of BDO, Melville, N.Y. “Today, CFOs are much more a part of senior management.”
Increasingly, CFOs are taking on two new additional roles: strategists and catalysts, according to Alison Paul, vice chairman, Deloitte LLP and retail and distribution sector leader.
“As strategists, they are shaping the overall direction of a retailer’s business, working directly with the CEO,” she explained. “They are vital in providing financial leadership and aligning business and finance strategy to grow the business. As catalysts, they are taking on an additional responsibility of instilling a financial approach and mind-set throughout the organization to help other parts of the business perform better.”
Shift: The shift has been driven by a number of factors, including the financial crisis, competition, globalization, technological innovation, sustainability awareness, growing regulations and compliance issues.
“The role [of CFOs] overall during and after the financial crisis has hit an inflection point,” explained Chris Donnelly, global managing director of Accenture Retail, Chicago. “It was such an extreme event that it forced them into the forefront. [CFOs] are taking on more responsibility beyond accounting and cash management functions. They are taking on more strategic discussions.”
But this evolution may have been even longer in the making, as the changes in retail over more than two decades has increased the need for creative thinking and someone dedicated to looking at a larger, more strategic picture.
“Now [the shopper] has so many options,” said Ellen Williams, senior client partner in Korn Ferry’s financial officer practice, Stamford, Connecticut. “Twenty-five years ago, department stores were king. Then came specialty stores, then e-commerce. Now, with omnichannel retailing, companies have to be very strategic.”
Partners: The best CFOs now are partners with the CEO, sometimes literally the person charged with looking forward, and anticipating challenges and opportunities as the CEO and COO deal with daily operations. The result is that the CFO becomes something of a bench coach, a sounding board for the CEO.
“The CEO wants to push product,” explained Bob Comeau, a principal with Deloitte Consulting LLP, McLean, Virginia. “The CFO figures out how to do it. Today’s CFO has to look at a strategy and make it so it can be financed.”
But the CFO also should also have the freedom to challenge the CEO, to push back on ideas while allowing the CEO to talk through ideas, noted Les Berglass, chairman and CEO of executive search firm Berglass+Associates, New York City.
“The business has changed so much,” Berglass said. “Great CFOs used to be expected to know all the answers. Today’s great CFOs are the ones who know the right questions to ask.”
The growing scope of the job also means changing the skill set (see story, page 12) of the men and women who hold the post. Where once an accounting or finance degree was essential, it’s possible that a CFO won’t even be a CPA at all. Schooling still matters, but even more important is experience in multiple areas, or running a business or division, even if that’s in another company — or industry.
As the CFO role continues to evolve, it’s only natural that, for some, it is becoming a stepping stone to the number one position, either in house or at a different company.
According to executive search firm Crist|Kolder Associates’ “Volatility Report 2013,” report, CEO hires with CFO experience rose to 22% in 2013, up from 13% in 2012.
Bob’s Stores parent company to acquire Sport Chalet
Vestis Retail Group, the parent company of Bob’s Stores and Eastern Mountain Sports, has set the wheels in motion to acquire Sport Chalet.
The acquisition will create one of the largest sporting goods retailers in the United States, with more than 150 stores and coverage on the East and West coasts. Sport Chalet will continue to operate stores under its existing brand name, and according to Vestis Retail Group, no store closures are planned.
Sport Chalet’s chairman and CEO Craig L. Levra will remain at the helm and continue to run the business out of Los Angeles, reporting to Vestis CEO Mark Walsh. Vestis’ corporate headquarters will remain in Meriden, Connecticut.
"For the past year, we have methodically explored a wide range of options to position Sport Chalet for growth and to further our strategic initiatives," Levra said. "We believe Vestis is the ideal partner given its base of stores in the Eastern U.S. and synergetic vendor relationships and inventory platforms. We believe we will be very well positioned to compete in today’s retail environment as part of a larger organization with significant scale advantages and broad geographic reach."
Kate Upton heads to Times Square Express for denim campaign
Express brand ambassador Kate Upton will debut her first advertising campaign for the retailer. The launch of the fall 2014 denim campaign with Upton makes her the first celebrity spokesperson to be featured in the brand’s advertising in more than a decade.
Upton will celebrate the launch with an exclusive RSVP-only "A Date with Denim and Kate Upton" event at the recently opened Express Times Square store in New York Tuesday, July 8.
Available in-store and online at express.com beginning July 7, the denim collection features updated fabrics, washes, premium tailoring and new fashion details.
"I grew up wearing Express jeans," said Upton. "When I’m not dressing for the red carpet, I love to dress up in a pair of great fitting jeans and boots. It’s my go-to look."
To celebrate the campaign launch, Express will kick off festivities at 6 p.m. with a two-hour shopping event where the first 25 customers to spend $200 or more will win a meet and greet with Upton. Additionally, all event attendees will receive an exclusive 25% discount between 6 and 8 p.m.
Express requires attendees to RSVP to [email protected] through Monday, July 7. Space is limited and RSVPs will be granted on a first come, first served basis, according to the retailer.