07 June 2022
CEOs are stepping down at The RealReal, Sephora
On the Move has the latest executive-level updates in ecommerce and consumer goods.
On the Move has the latest executive-level updates in ecommerce and consumer goods.
Welcome to On the Move. In this hiring-focused weekly feature, The Current is rounding up recent arrivals and departures at brands and retailers across the ecommerce landscape.
Last week, the big news in ecommerce executive-level moves came from Amazon: Dave Clark, the CEO of Amazon's consumer business, announced he is leaving the company in July after 23 years. Check out our look back at his legacy in logistics.
This week, CEOs are departing at The RealReal and Sephora. Plus, Peloton and InterParfums are making changes at the CFO spot.
Check out the latest details:
Luxury resale platform The RealReal announced that founder Julie Wainwright is stepping down as CEO.
Wainwright’s departure is effective Tuesday. She will serve in an advisory role for the rest of 2022. The San Francisco-based company will retain an executive search firm as it seeks a new CEO. In the meantime, COO Rati Sahi Levesque and CFO Robert Julian were named co-interim CEOs.
“I am deeply proud of the company we have built and am honored to have worked with a team that champions our founding vision of creating a more sustainable future for fashion,” said Wainwright, in a statement. “The RealReal continues to make progress on its path to profitability, and I feel now is the right time for the next generation of leadership to guide the company through its next chapter.”
Wainwright started The RealReal in 2011 after leading ecommerce and tech companies including SmartNow.com, Bellamax, OntheFrontier and Pets.com. Over the 11 years that she led the company, the resale platform grew to host more than 27 million members.
In that time, online resale has also picked up, with ThredUP projecting recently that the secondhand apparel market is expected to grow 127% by 2026 to a value of $218 billion. At the same time, more platforms are offering resale. It’s not just marketplaces, either. The number of brands with their own resale shops increased from eight in 2020 to 30 in 2021, according to ThredUP.
On the company’s recent first quarter earnings call, Wainwright said the company is projecting a good year, despite inflation and cost pressures facing many retailers. She called the luxury business “tremendously resilient.” For the quarter, gross merchandise value was up 31%, and active buyers rose 21%.
“We have a phenomenal flywheel where our buyers become sellers and our sellers become buyers and that gives us great confidence,” Wainwright told analysts on that call.
Martin Brok is leaving the CEO role at prestige beauty retailer Sephora at the end of June over “a divergence of views,” according to an internal memo cited by WWD.
Brok was named CEO of Sephora in 2020, bringing experience from executive roles at Starbucks and Nike. He succeeded Chris de Lapuente, who rose to the CEO role of the selective retailing division of Sephora owner LVMH Moet Hennessy Louis Vuitton.
Now, de Lapuente will return to the role of CEO at Sephora, which he previously held for 10 years. During his last stint, he was heralded by LVMH CEO Bernard Arnault for turning Sephora into a global beauty leader, WWD reported.
Interactive fitness platform Peloton said Liz Coddington will become chief financial officer of the company on June 13.
Coddington previously served as VP of Finance at Amazon Web Services, and held senior leadership roles at Adara, Walmart.com and Netflix.
She succeeds Jill Woodworth, who stepped down as CFO after working with the company since 2018.
Peloton is making a series of moves as it attempts to right itself following a post-pandemic period when demand for its stationary bike-based connected fitness platform cooled, and the company faced a glut of inventory. Losses have followed, and the company cut 2,800 jobs this year.
In February, former Spotify and Netflix executive Barry McCarthy succeeded John Foley as CEO. The next month, former Grove Collaborative COO Andrew Rendich was hired as chief supply chain officer.
In its most earnings report, McCarthy made stabilizing cashflow the first of his three primary goals toward a turnaround, TechCrunch reported.
"Liz is a deeply talented finance executive and will be an invaluable addition to Peloton's leadership team. Having worked at some of the strongest and most recognizable technology brands, she not only brings the expertise needed to run our finance organization, but she has a critical understanding of what it takes to drive growth and operational excellence," said McCarthy, in a statement. "I have seen her intellect, abilities, and leadership firsthand and am excited to work closely with her as we execute the next phase of Peloton's journey."
Nick Beighton, who left British retailer Asos in October, is joining the board of directors at the marketplace Secret Sales in the role of chairman.
Secret Sales was purchased by Lifestyle Retail Group in 2019. Under new leadership, it was transformed from a flash sale website into a discount marketplace featuring apparel and beauty products, Fashion United reports.
At Asos, current chief commercial officer José Antonio Ramos Calamonte is expected to be appointed CEO in the coming weeks, according to a report in The Sunday Times. Calamonte is the former CEO of Salsa Jeans, and led commercial strategy for brands at Inditex.
Perfumes company Inter Parfums announced an upcoming transition in the role of chief financial officer.
Current CFO Russell Greenberg will retire September 6. With 30 years at the company, he has served alongside Jean Madar since its early days.
“Russ has played an integral role in the growth and evolution of our company for 30 years. He has been by my side for all the significant initiatives we have undertaken, through the best of times and the most challenging,” said Inter Parfums CEO Jean Madar, in a statement. “He has earned, and well deserves, to devote more time to family, friends, and the activities he most enjoys.”
In turn, Michel Atwood, the former VP of Finance and Strategy at Estée Lauder, will assume the top financial role and join the company’s board. Atwood brings experience overseeing the company’s fragrance business, and served as a member of the cosmetics company’s senior finance leadership team. He previously served as CFO of global prestige fragrances at Procter & Gamble.
Founded in 1982, Inter Parfums manufactures and distributes fragrance products as the exclusive licensee for brands including Abercrombie & Fitch, Coach, Guess and Kate Spade.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.