Could ANYTHING be worse for RL right now than Chris Peterson (President) being fired/pushed out/leaving/fired? Probably not.
The reality is that RL is in the middle of a simply massive restructuring (again). It’s one that is choppy at best, but it’s progressing. The crux of it is that the company has been operating in a simple two dimensional matrix, that is simply no longer appropriate for a company like RL that wants to look ahead and add another $10bn in sales. Now it's shifting to a 6-dimensional matrix -- i.e. 6 Headed Hydra. As complex as it is, it's absolutely critical for RL.
The problem is that Peterson was the architect of this plan. He was basically ‘P&G-ing’ the operational side of RL (was CFO of largest biz inside P&G). The history of consumer packaged goods execs coming into the fashion business over time is checkered – and that’s being generous. But Peterson looked like he was one of the few that would make it. Guess not – at least not after his new boss was inserted between him and Ralph Lauren.
On the plus side, it shows that Lauren is actually giving Stefan Larsson (CEO) some latitude to actually make decisions. But it seems a bit soon in his tenure to make such a massive decision as to let Peterson go.
So Ralph is left having to move forward with an incredibly complex reorganization without the person who crafted and is accountable for it. Either that, or things are blowing up inside the organization right now and someone had to take the fall.
Either way, this is really really bad. We backed off of RL earlier this year on the long side. No, we wouldn’t touch it no matter how cheap it gets…because the ‘e’ part of the equation is out the door, for now.