Philadelphia—Shares of Urban Outfitters Inc. rebounded in early trading today after the specialty retailers’ stock plunged earlier this week when it announced that Glen T. Senk, ceo, had left the company on Jan. 9.
Richard A. Hayne, chairman of the board, president and co-founder, was named to replace Senk, who left to become chief executive at David Yurman, Inc., the luxury jewelry brand.
The news of the abrupt change at Urban Outfitters, which operates Anthropologie, Free People, BHLDN, Terrain and Urban Outfitters brands, concerned analysts and investors, plummeting shares 20%.
Senk, 55, joined the company in 1994 as president of Anthropologie, became a director in 2004 and ceo in 2007. He had been trying to turnaround Urban Outfitters since the company posted a drop in net income and slower sales in the past four quarters.
Hayne “Instrumental” in Urban Outfitters’ Success
At first, Hayne’s appointment was viewed critically, as many analysts saw the appointment as a short term fix and worried that a turnaround might take longer than expected.
Paul Atkinson, head of private equity Aberdeen Asset Management, cited a lack of a “strong hand in day-to-day management.” Citigroup analyst Jeff Black commented that “organizational issues could remain a serious distraction over the next year.”
But Urban Outfitters stood behind Hayne, 64, who has been chairman and president of the company since he and his wife Judy Wicks founded it in 1976. Hayne, No. 262 on Forbes 400 list of the country’s highest net worth individuals, is still Urban Outfitters’ largest shareholder at 21%.
A spokesperson for the board said: “The entire board is pleased to name Dick as the company’s chief executive officer. He brings over 40 years of retail experience and strong leadership. Mr. Hayne has been instrumental in the company’s historical success and we are extremely fortunate to have an executive of Dick’s tenure and caliber in place and prepared to lead the company’s continued growth.”
Hayne’s role in the company was emphasized again on Thursday by Eric Artz, the company’s chief financial officer, who spoke at an investor conference in Miami. While Artz called Senk’s departure “unfortunate” he said Urban Outfitters would be entering a “new era” under Hayne’s leadership.
“I’m not here today to deliver a message that the strategy is moving anywhere different than where it has been,” Artz added.
Moreover, some analysts welcomed a change at Urban Outfitters. Betty Chen, a retail analyst at Wedbush Securities, upgraded the company’s stock to neutral on Thursday.
“We believe that Richard had been very involved with the business on a day-to-day basis already,” Chen said. “He’s also very well-loved and respected by the internal team at the company, and, therefore, we believe that perhaps some new ideas could also accelerate the pace of the turnaround at the company.”
“Investors should also recall that Senk’s time at the helm was hardly an era of growth and success,” reported InvestorGuide today. “The company suffered four consecutive quarters of sales declines in the past year, which Senk blamed on increasing competition, poor fashion appeal and a clogged inventory. Senk used extreme markdowns to clear the excess inventory, at a huge cost to the company’s margins. The company’s domestic stagnation hasn’t been helped by its international stores, which are primarily based in Europe– the current epicenter of the world’s economic woes.”
Senk Jumps to David Yurman as CEO
Meanwhile, many were equally surprised that Senk resurfaced so quickly at David Yurman, where he fills a post vacated by Paul Blum in 2010. Senk, who serves on the board at Yuman, may help lead that mostly U.S.-based brand into the internationally arena. Senk also will take an ownership stake in the privately-held David Yurman Inc.
“We have known and respected Glen for more than a decade—as much for his creative vision and inspired leadership as for his exceptional management and operational ability. His arrival will allow us to truly focus on what we love doing–designing–while we collectively build an even greater global brand and the company we’ve always wanted,” said David and Sybil Yurman.
Senk, who has declined comment about Urban Outfitters, said he is looking forward to a new challenge. “[David Yurman Inc.] is a company that’s grown organically, remaining authentic in every way, and I am thrilled to work with such talented pioneers to further evolve the organization and the business.”
Prior to joining Urban Outfitters, Senk served as senior vice president, general merchandise manager of Williams-Sonoma, Inc. and chief executive for the London-based Habitat International Merchandise and Marketing Group. Senk’s retail career began at Bloomingdale’s in 1981 where he later became senior vice president and managing director of Bloomingdale’s By Mail, Ltd.
In 2010, Senk was ranked within Fortune‘s Top 50 Businesspeople of the Year and named the FGI Corporate Leader of the Year. Senk serves on the boards of Tory Burch, and Melissa & Doug, and he serves as chairman of the Vetri Foundation.