In late March, Richard Cohen held another of his town hall meetings with employees at St. John Knits International Inc.
Cohen, who led the Irvine-based women’s clothier through a dizzying year and a half of change, started the town hall meetings soon after he arrived in late 2004.
The British-born fashion executive saw the gatherings as a way to keep people up to speed on his strategy. His plan was nothing short of revolutionary for stately St. John: wooing women in their 30s.
By early April, Cohen was gone.
Cohen, who last year made headlines by hiring Angelina Jolie as the company’s model, ended up turning more heads with his abrupt exit.
Philip Miller, a former chief executive of Saks Inc.’s Saks Fifth Avenue, has taken over while the company seeks a permanent replacement.
Cohen and St. John said he went back to New Jersey for personal reasons, including medical care for his children.
Jim Kelley, chairman of St. John and president of New York-based Vestar Capital Partners, which owns a majority stake of the company, didn’t return calls for this story.
Cohen was feeling pressure, according to sources familiar with the company. The main reason: His plan to reach out to younger customers was too aggressive. St. John’s core wearer,affluent older women,was balking.
A turnaround of St. John likely wasn’t happening fast enough for Vestar.
The company was seeing falling sales and profits when Cohen took over.
Privately held St. John used to report financial results for the benefit of its debt holders. It hasn’t done so in the past year after refinancing its debt.
The last time it did report results, it wasn’t pretty. St. John saw a 4% decline in sales to $103 million for the first three months of 2005. Net income fell 18% to $5 million.
The situation inherited by Cohen could have been made worse with slow acceptance by younger women and a backlash from traditional customers who may not have been able to fit into the sleek new designs.
Some ‘Softness’
St. John has seen “some softness at retail this past season and, to a certain extent, we anticipated it,” Vestar’s Kelley recently told trade publication Women’s Wear Daily.
“The process of taking a very large, successful apparel brand and expanding the client base takes time, and a few bumps along the road are expected,” he said.
The effort to broaden St. John’s appeal to younger women predates Cohen. Kelly Gray, daughter of founders Robert and Marie Gray, started making subtle shifts a decade ago. Kelly and former co-chief executive Bruce Fetter made a noticeable push in that direction in 2004.
Cohen put things into overdrive.
Upon arriving, he brought in a hand-picked team of four vice presidents from big fashion companies. Not long after, longtime operations man Fetter left.
Kelly Gray stayed around for a while as creative director and then pulled back as a consultant last summer. At that time, chief designer Marie Gray said she was retiring but keeping a board seat.
In June, Cohen hired Gisele B & #252;ndchen for St. John’s ads in a move that surprised many. The sleek supermodel seemed to be about as far from the company’s mainstay audience of socialites and politicians as you could get.
Enter Jolie.
In late 2005, Cohen enlisted Jolie as the new face of St. John. The move was a gamble: Would the onetime bad girl turned global emissary be St. John’s bridge between core buyers and young, professional women?
New York-based Lipman created the Jolie campaign, which broke this spring. The spreads are a contrast to former ads featuring Kelly Gray surrounded by handsome men in exotic locales.
One of St. John’s latest ads features a slender, pre-pregnant Jolie in an office gazing down at a sleek laptop computer on a desk. Her outfit is classic St. John,a white knit skirt and jacket with black trim,except in a couple of sizes smaller.
“It’s pretty clear the product they developed didn’t appeal to the core customer,” said one source familiar with the company who didn’t want to be named. “Richard is a marketing guy. What he’s not is a product guy.”
Cohen sought to make St. John into more of a sophisticated designer that’s young, hip and sexy. Think Gucci, Chanel, Prada and Dolce & Gabbana.
That meant going with a European tailored fit.
The effort impressed fashion editors at a recent St. John show in New York, said Nicole Phelps, executive editor of Style.com, the online site for Vogue and W magazines.
The pieces had “slim silhouettes,” and were “very up to date and modern,” Phelps said.
“They were all in a size zero or two,” Phelps said. “It’s hard to say what they’re going to look like in a size 12.”
Some St. John devotees,well-to-do women in their 40s, 50s and 60s,haven’t swallowed the changes.
The new line “doesn’t fit larger customers,” said a saleswoman at a St. John boutique in New York.
Some customers are excited, coming in with ads of Jolie wearing the new garb, the saleswoman said.
But the “old core customers like the way it was” and want “some traditional knits back,” she said.
The store still offers St. John’s popular knit suits, known for quality, classic details and conservative styling.
Marie Gray, who didn’t return queries for this story, used to try on St. John’s clothes herself to make sure she liked the fit. The company also tested pieces on models in their customers’ sizes.
“Season after season, if you were a St. John client, you knew it would fit,” said a source familiar with the company.
It’s no surprise some St. John fans are resistant to change, Phelps said.
“Once people find the perfect suit and you can get it in any color, why would you want anything else?” she said. “St. John has to pay attention to that.”
Older styles,jackets, blazers and suits,go quickly at Recycled Rags in Corona del Mar, according to saleswoman Sheila Woolsey.
The second-hand boutique has sold St. John for 37 years, she said.
Diehard St. John customers are typically older women who want clothes that don’t wrinkle and have an elastic waist, Woolsey said.
The company’s “older styles are what women look for,” she said. “The young women are a lot more hip, they can figure it out. They don’t need St. John.”
St. John’s clothes are sold at the company’s own company boutiques (there are about 30) and at upscale department stores, such as Saks Fifth Avenue and Neiman Marcus.
Ginger Reeder, Neiman Marcus vice president of corporate communications, declined to address St. John’s changes.
St. John is an “important partner for our company and important part of our vendor mix,” Reeder said.
Neiman Marcus started running St. John’s online store in February.
“We have been doing business with them for close to 30 years and we will continue working with them to grow the business,” Reeder said.
Jolie: Dramatic Change
In hiring Jolie, Cohen wanted to do something dramatic and signal to the industry that St. John was changing.
“They went and got someone very hot,” said a source familiar with the company. “I don’t know if it was effective or not.”
Jolie may not fit the typical St. John profile, but neither did Kelly Gray, who appeared in ads for two decades, Style.com’s Phelps said.
“She’s not the typical St. John customer either,” Phelps said of Kelly, who started modeling as a teen. “Women like to look at other beautiful women.”
For now, St. John is in the hands of retail veteran Miller, who has been a St. John director since 2003. He headed Saks Fifth Avenue from 1993 to 2000.
There’s been no word on when a replacement will be named.
Miller declined to comment for this story.
Sources said Miller understands St. John and its customers well, having featured St. John clothes at Saks during his time there.
St. John’s challenge hasn’t changed, according to Phelps: keep core customers happy while spurring sales by getting its younger designs on the right people.
As for Cohen, industry watchers are waiting to see where he ends up next.
Cohen spent 16 years as chief executive of the U.S. arm of Gruppo Ermenegildo Zegna, an Italian men’s clothing designer. He came to St. John by way of a headhunter.
Other fashion industry executives told trade publication DNR they expect to see Cohen return to “the more genteel world of men’s wear.”
Cohen himself told DNR he was going to take his time and “explore all my options.”
He called his time at St. John “fascinating and incredible” and that he “never worked so hard in my life.”
Cohen reiterated that he left St. John for personal reasons and didn’t comment on changes at the company or how it is faring.
