The Reason Behind The Sudden Departure Of Ralph Lauren's CEO

Shares of Ralph Lauren Corp RL tumbled more than 11 percent to a new 52-week low of $77.15 on Thursday after the company reported its fiscal third-quarter results, which contained a surprise management move.

Stefan Larsson will step down from his role as CEO of Ralph Lauren after holding the job for just two years. The company didn't provide any specific reason in its earnings report, merely stating, "The Company and Stefan Larsson, President and Chief Executive Officer, also announced today that they mutually agreed to part ways."

Larsson will remain with the company until May 1, 2017, and a search for a replacement is underway.

Bloomberg's Coverage

According to a Bloomberg report, Larsson's departure can be attributed to disagreements with the company's 77-year old founder Ralph Lauren. Specifically, the two couldn't agree on a strategy to reinvigorate the brand which may have seen its popularity peek decades ago.

The company has also over-relied on the troubled department store segment and struggled in juggling appeasing its aging customer base and appealing to millennial shoppers.

"We both recognize the need to evolve. However, we have found that we have different views on how to evolve the creative and consumer-facing parts of the business," Lauren told Bloomberg in the statement. "After many conversations with one another, and our board of directors, we have agreed to part ways."

The Bloomberg report also noted that Larsson's prior experience in budget retailers including H&M and Old Navy runs counter to Ralph Lauren's upscale image — a view that is maintained by some fashion experts as well.

Milton Pedraza, a luxury consultant, told Bloomberg that Larsson's appointment as CEO of Ralph Lauren was ill-fated and not a good fit given his prior experience.

Image Credit: By Keith Allison from Owings Mills, USA (Morgan Pressel) [CC BY-SA 2.0], via Wikimedia Commons