California Apparel News

Finding the right people to run apparel companies in the new economy has forced the apparel industry to adopt a new paradigm.

In the age of expanding global supply chains, brand importance and pressure from stakeholders, more apparel manufacturers and retailers are looking beyond traditional channels for their managers.

San Francisco–based Gap Inc. two years ago tapped Paul Pressler to succeed Chief Executive Officer Mickey Drexler. Pressler came from the Walt Disney Co. He subsequently hired other Disney executives including Mike Tasooji as chief information officer and went to a wine and spirits company, Diageo Plc of London, to hire Chief Supply Chain Officer Nick Cullen.

Others have taken similar avenues. Gap’s neighbor in the Bay Area, Levi Strauss & Co., recruited CEO Phil Marineau from PepsiCo about four years ago. Liz Claiborne’s Paul Charron originated from Proctor & Gamble. The Limited, Sara Lee, Russell Corp. and Sears have also looked to outsiders for help.

Other industries are also conducting crossindustry recruiting. Home Depot has been raiding General Electric’s corporate closet. Starbucks looked to brand wizard Martin Coles, formerly of Nike Inc. and Reebok International Ltd., to help build the company’s global presence. And Toledo, Ohio, glass and plastics packaging company Owens-Illinois picked up new president and chief executive officer Steve McCracken, former president of DuPont’s textiles and interiors division.

In most cases, these moves have paid off. Gap has turned around since hiring Pressler. Its 2003 earnings nearly doubled to $1 billion. Levi Strauss, still in the midst of a turnaround, has also seen improvements.

The common thread found in these managers is that they have experience in managing global supply chains. In many cases such as Charron’s, they are technologically savvy and have used technology to streamline their operations. Pressler has done it at Gap. They are also accomplished at implementing what is known as “best practices” solutions for business, that is, implementing the strategies and technologies that have proven most effective after years of research.

Finding such talent isn’t easy within traditional apparel industry channels, said recruiters and industry executives. While the creative positions within apparel companies are still drawn from traditional talent pools, the basic infrastructures of companies have changed as a result of expanding sourcing, which have companies dealing with multiple tiers of suppliers. Consequently, companies have had to shift duties from local manufacturing to product development and that has created a new subset of workers. Since the apparel industry is fairly new to globalization compared to other consumer goods industries, there’s been a lack of industry-specific talent to hire from and it trickles from the top downward.

“It’s a whole new level of leadership we’re seeing today,” said Tierney Remick, managing director of global consumer markets for Chicago-based executive search firm Korn/Ferry International. “With [the importance of the] global supply chain at an alltime high and needs to improve customer service and brand building at a high, you need to bring in the right talent and hire the best in class and that can mean going outside,” she said. Remick added that some companies opt for the traditional system of hiring “heirs apparent” within a firm or rotating chairs and recruiting from direct competitors to find the best talent. For others, benefits come from gaining insight from leaders who can look beyond the four walls of a specific business and gain deeper insight into a fickle consumer base, she said.

Still, there are physical restraints that are forcing apparel firms to go outside for talent regardless.

“We will see a continued recruiting of supply chain executives from outside apparel to speed the evolution of consumer-driven supply chains that other industries take for granted,” added Marshall Gordon, industry executive for Retail, Apparel & Footwear for SAP America, a technology firm that specializes in supply chain management. “Those executives will hold strategic roles in the organizations they join with a prime responsibility for operational excellence.”

Debbie Kreisler, CEO of Evie Kreisler & Associates, which does a lot of apparel industry executive searches in Los Angeles, agreed but said some apparel firms place a lot of importance on executives that know how to build brands, regardless of the industry they came from.

Korn/Ferry’s Remick said she thinks that that common ground will come through hiring externally and internally to create balance.

Remick recently attended a Luxury Marketing Council conference in New York where cross-industry recruiting was a major topic of discussion. Many are still opposed to the idea. Even Pressler’s appointment at Gap was viewed with skepticism.

“He was an outsider but he fit the bill. He understood how to run a multi-divisional branded global business,” said Bob Nahas, managing director of New York–based Herbert Mines Associates, the firm that recruited Pressler for Gap.

Nahas said cross-industry hiring does not always work, especially in areas like sales.

“You have to have a passion for your product in sales and taking someone from a packaged consumer product and bringing them into apparel might not work,” he said. “We’re seeing most of it done within the infrastructure and less on the front end of business.”