VF CEO Steve Rendle to Exit in Unexpected Departure
VF Corp. announced this morning that CEO Steve Rendle is retiring effective immediately.
The company also announced that VF is experiencing weaker than expected demand across its categories, especially in North America, and a more promotional environment. As a result, the company further lowered its earnings guidance for the fiscal year.
VF appointed an interim President and CEO – Benno Dorer, the lead independent director of the VF Board or Directors – and has launched a search for a permanent CEO.
This abrupt change at the top is unusual for VF. The company has a history of diligent succession planning. For example, Rendle became CEO in January 2017 after being groomed for the job by former CEO Eric Wiseman. Prior to becoming CEO, Rendle had served as president and chief operating officer of VF’s business coalitions worldwide, and had previously held other brand leadership and corporate positions at VF.
And when Wiseman’s retirement was announced in October of 2016, there was a three-month transition period before Rendle took over the top job. In the 2016 announcement of Rendle’s appointment as CEO, Wiseman spoke about the company’s approach to succession planning.
“As you’d expect of VF, and with full credit to our board of directors, we have a long-standing, rigorous and successful approach to succession planning,” Wiseman said at the time. “We’ve been working since 2008 to identify and prepare the right person to succeed me when the time comes. That time is now.”
It appears that succession planning is not a factor this time around with Rendle, who is also chairman of the board of directors, leaving immediately and in the midst of a challenging period for the company.
Business Tough in North America
VF said today it is lowering its outlook again for the fiscal year to reflect weaker demand than expected, mostly in North America.
That is resulting in “a more elevated than expected promotional environment as well as order cancellations in the wholesale channel to manage trade inventories,” the company said. VF also said inflation is starting to impact spending in Europe, and China is still being negatively impacted by COVID-19 disruptions.
Total VF revenue for the year is now expected to rise 3% to 4% vs. the previous guidance of a 5% to 6% increase.
And profitability is taking a bigger hit due to the promotional environment in North America, VF said. Earnings per share for fiscal 2023 should now range from $2 to $2.20 vs. the previous outlook of $2.40 to $2.50. And that outlook had already been downgraded from VF’s original guidance of $2.60 to $2.70.
For context, earnings per share for fiscal 2022 was $3.18.
Board Thanks Rendle
Interim CEO Benno Dorer, who previously held leadership roles at The Clorox Company and Procter & Gamble, thanked Rendle for his service to VF.
“The Board thanks Steve for his many contributions and leadership during his nearly six years as CEO and nearly 25 years with VF,” Dorer said in a statement. “Steve’s commitment to the business, passion for building strong brands and focus on culture have helped VF evolve our portfolio of strong active-lifestyle brands and establish VF as a purpose-led company. We wish Steve well in his future endeavors.”
Rendle said in a statement that he remains confident in the vision for VF.
“It has been an honor to lead VF as CEO over the last five years,” Rendle said. “I depart with the deepest gratitude for the extremely talented and dedicated global team at VF. I remain as confident as ever in VF’s tremendous potential and look forward to watching the company’s continued success.”
Here at SES, we always appreciated our interviews with Rendle, who was accessible and willing to talk with us over the years, including when he was president of The North Face brand.
The abrupt nature of his departure, however, made us think of former Vans President Doug Palladini, whose exit from Vans in March 2022 was also a surprise and came at a challenging period for the brand.
Doug was replaced by Kevin Bailey, who previously led Vans and went on to hold many top corporate leadership jobs at VF. Vans is VF’s largest, most profitable brand and Kevin is tasked with important job of turning Vans around. However, he has always seemed like a potential successor to Rendle because of the various brand and corporate leadership roles he has held at VF.
Steve Murray, the former North Face president and a VF veteran, also seemed like a potential successor, but he retired this summer and returned to his native England. He told us in a retirement interview, that he had no plans to join another company once he left VF.
With so many important industry brands under its corporate umbrella – including Vans, The North Face, Timberland, Dickies, and Supreme – it will be interesting to see if VF bucks company history and brings an outsider in to lead the company into the future or if it eventually looks within to find its next leader.