David Jaffe, chairman and CEO of US women’s wear retailer Ascena Retail Group, has stepped down from his position after leading the company for 27 years.
Jaffe, who will remain on the board of directors, has been succeeded by Gary Muto, currently president and CEO of Ascena Brands.
In addition, Carrie Teffner has been named interim executive chair of the company’s board.
“Leading Ascena over the past twenty-seven years has been a privilege. As the company continues its transformation, the board of directors and I mutually agreed that these decisions are right for the business and its shareholders. I am extremely confident in Ascena’s future under Gary’s leadership and look forward to continuing to serve Ascena as a member of the board,” Jaffe said.
Muto added he is working with Jaffe, Teffner and the board to ensure a smooth leadership transition. “I am eager to lead and work with our Ascena associates, who share my deep commitment to our customers, brands and shareholders. Together we will realise Ascena’s potential as the board and management continue to execute on our previously announced strategic initiatives, including a comprehensive assessment of Ascena’s portfolio brands, operations, assets and continued cost savings.”
Meanwhile, the company has also announced the departure of president and COO Brian Lynch.
During his tenure, Lynch led Ascena’s Change for Growth transformation plan which is on track to deliver a run rate cost savings of US$300m by July 2019.
Susan Anderson, an analyst at B Riley, notes: “We believe this reorganisation demonstrates that everything is on the table as the company’s seeks to turn the business around. Management reiterated that they continue to look at opportunities to maximise shareholder value through their announced initiatives, including an assessment of the brand portfolio, operations and previously announced cost savings plans.”
Ascena refused to be drawn into speculation it is mulling the sale of its Dressbarn unit earlier this month, after booking a second-quarter net loss of $72m in February, compared with a loss of $39m a year earlier, which it blamed on “macro-headwinds” impacting the sector.