Gary Friedman back as chairman, co-CEO of Restoration Hardware
Corte Madera, Calif. – Restoration Hardware Holdings announced that Gary Friedman has been reappointed co-CEO and chairman, effective immediately. Friedman will return to his prior role at the company alongside Carlos Alberini, who has also been named co-CEO. The retailer, now calling itself RH, also said it has acquired the full rights to Friedman’s new venture, Hierarchy, which it will rebrand as RH Atelier.
Friedman stepped down from Restoration last October, reportedly after the board determined that he had had an inappropriate relationship with a female employee. However, the company never commented on the reasons for his departure and subsequently gave Friedman the title of chairman emeritus, creator and curator.
“I am honored to be rejoining Carlos, and the entire RH team in our quest to create the most innovative and inspiring brand in the industry,” Friedman stated. “This team’s ability to curate and integrate new products, businesses and experiences, then scale them across our multi-channel platform has enabled us to build one of the fastest growing brands in the marketplace.”
Restoration said that the Hierarchy concept will focus on the development of luxury apparel, accessories, footwear and jewelry, and be integrated and launched on the company’s platform.
Friedman served as chairman and Co-CEO of Restoration Hardware from June 2010 to October 2012 and served as CEO since March 2001.
Prior to joining the company, Friedman spent 13 years at Williams-Sonoma, Inc., where he served as president and COO from 2000 to 2001, as CMO and president of retail stores from 1995 to 2000 and as executive VP of the company and president of the Williams-Sonoma and Pottery Barn brands from 1993 to 1995.
Previously, Friedman spent 11 years with The Gap, Inc. in various leadership positions.
Bob’s Stores/EMS parent names Petty CEO
Meriden, Conn. – Vestis Retail Group, parent company of Bob’s Stores and Eastern Mountain Sports (EMS), has named James Petty as CEO effective July 8, 2013. Petty most recently served as president of retail stores for Cartier Inc. from 2007 to December 2012 and left the company after it relocated its retail group headquarters from Connecticut to Georgia. He also previously held executive positions at Limited Too and Gap Inc.
He replaces current Vestis CEO Mark Walsh who also serves as a managing director of Versa Capital Management, the private equity firm that owns Vestis. Walsh will remain as chairman of Vestis.
"This is a long-planned and natural leadership transition at this stage of Vestis’s development," said Gregory Segall, CEO of Versa. "Over the past five years, Mark has done a tremendous job in realizing the potential at Bob’s and he led the acquisition and initial transformation at EMS, positioning it for growth. We’re looking forward to Mark’s contributions to our existing and future investments in the Versa portfolio of companies."
Former Walmart CFO helps clean up competitor’s mess
Longtime financial executive and former Walmart U.S. CFO Michael Fung is helping discounter 99 Cents Only modernize inventory systems that have resulted in a series of accounting issues.
Fung, 62, retired from Walmart in early 2012, but was called back into service this past January by the private equity owners of 99 Cents Only. Fung was named interim chief administrative officer at the company to oversee finance, information technology and real estate. In addition, 99 Cents Only board member and former Food Lion president and CEO Richard Anicetti was named interim CEO.
The timing of their appointments is noteworthy because about the time Fung left Walmart after 11 years in various finance roles, including CFO of Walmart U.S. for six year, 99 Cents only was being taken private for $22 a share by an unconventional mix of investors. The buyout partners included a group led by the Los Angeles-Based private equity firm Ares Management LLC, the Canada Pension Plan Investment Board and members of the company’s senior management team that included CEO Eric Schiffer, his father-in-law and founder David Gold and his son and president and COO Jeff Golf.
However, earlier this year Fung and Anicetti were brought in, Schiffer and the Golds departed and the reason why became apparent last week when the company disclosed in a filing with the Securities and Exchange Commission that is was unable to file its annual report on form 10-K in a timely manner for the fiscal year ended March 30.
At issue were a range of inventory valuation issues that caused the company to overstate the value of inventories by as much as $20 million, according to the filing. The company said it was unable to resolve the matter without unreasonable effort or expense and thus the reason for the delay.
To avoid future problems, 99 Cents Only is in the process of upgrading its systems for accounting for merchandise inventories, including implementation of an SAP system that will for the first time track inventory at each retail store on a perpetual basis by stock keeping unit. The SAP implementation process will begin in fiscal 2014, with all stores expected to be included by the end of fiscal 2015. Walmart implemented an SAP system during Fung’s tenure with the company.
In another development related to the changeover in management, beginning in the fourth quarter of fiscal 2013 the company also changed how it estimates its excess and obsolete inventory so that reserves include items that are at least 12 months old and are not expected to sell above cost within 12 months as opposed to the earlier method that involved a 24 month period. As a result of the change in estimates, the company expects to record a non-recurring charge to cost of sales and corresponding reduction in inventory of approximately $10 million in the fourth quarter of fiscal 2013.