Dive Brief:
- Struggling retailer Fossil engaged Ankura Consulting Group for interim CFO services following the departure of its finance chief and treasurer Sunil Doshi, the company said in a Monday securities filing. The Richardson, Texas-based retailer appointed Ankura managing director Andrew Skobe as its interim finance chief effective immediately.
- Doshi, who took on the CFO seat in 2021, will be departing for another opportunity and will stay on through July 19 to help ensure a smooth transition, according to the filing. The company, which offers retail products including watches, handbags, wallets and jewelry, has begun a search for a permanent successor for its top financial seat.
- Doshi’s exit comes just several months after the retailer, which is facing significant financial challenges, announced that its long-time CEO and chairman, Kosta Kartsotis, would be stepping down from his positions after nearly 24 years at Fossil’s helm.
Dive Insight:
Fossil’s incoming interim Skobe has served as managing director, office of the CFO for Ankura for a year, according to his LinkedIn profile. Prior to Ankura, he served as interim CFO and provided financial consulting for Hudson Charles, with previous experience also including top financial and executive roles for Radisson Hotel Group, Icahn Enterprises, Dun & Bradstreet and Marvel Entertainment.
Interim leadership has expanded in recent years, with businesses looking for interim and part-time leaders that can be brought in to solve a particular issue or achieve a particular goal, sister publication CFO Dive previously reported.
Skobe will step into Fossil’s leadership team as it takes further steps to execute its Transform and Grow, or TAG, strategy — an initiative begun in 2023 aimed at reducing its operating expenses. The retailer is facing significant financial challenges following a disappointing 2023 and a lukewarm start to 2024 that has led it to make sweeping executive shifts over the past year.
The company saw its losses skyrocket in its fourth quarter for 2023, according to its full year earnings results published March 13. The company’s net loss widened to $28.2 million compared to $9.4 million in the prior year period, with net sales for Q4 declining by nearly 16%. For the full year, its net loss ballooned to $157 million compared to $44.2 million the previous year.
The announcement that its long-time CEO would be leaving came in a separate March 13 release alongside its full year results. The company appointed its Chief Operating Officer, Jeffrey Boyer as interim CEO. Kohl’s CEO Kevin Mansell was tapped as board chairman, with Kartsotis to remain in a transitional role through September of this year. Boyer has played a key role in executing Fossil’s TAG strategy.
Also in March, Fossil appointed two new members to its board, appointing Pamela Corrie to its nominating and corporate governance committee and Eugene Davis to its audit committee, according to a company filing.
In another executive shift, the company also informed its Chief Human Resources Officers, Darren Hart, that the role had been eliminated as part of its TAG strategy, according to an April filing with the Securities and Exchange Commission.
The TAG plan aims to drive $300 million in operating income benefits by next year, according to Fossil’s Q1 2024 earnings report, with the plan generating $125 million in operating income benefits for 2023.
For its Q1 2024 ended March 30, Fossil reported net sales of $255 million, a 22% decrease on a reported basis year-over-year. The retailer’s net loss for the quarter totaled $24.3 million, compared to $41.3 million for the prior year period. Fossil expects its TAG plan to generate additional annualized operating income benefits of at least $100 million in 2024, with associated restructuring costs expected to be $35 million for the year compared to $49 million in 2023.
Alongside its interim CFO shift, Fossil also affirmed its full year 2024 outlook, with the retailer expecting net sales of approximately $1.2 billion, according to a Monday press release.
Fossil and Ankura did not immediately respond to requests for comment.
via https://www.aiupnow.com
Grace Noto, Khareem Sudlow
