St. John Knits Taps President Kelly Gray To Become Co-CEO
By JENNIFER BELLANTONIO
It looks like Robert Gray, the 76-year-old chairman and chief executive of Irvine-based St. John Knits International Inc., may retire after all.
Gray’s daughter, Kelly, and Bruce Fetter, now both co-presidents, are being groomed to take on the senior Gray’s duties as chief executive, according to the company.
Robert Gray said he expects the duo to assume their new roles “later this year.” He’s set to become chairman emeritus and serve as a consultant to the upscale women’s clothier, he said.
The news comes about six months after the resignation of Hubert W. Mullins, the company’s second chief executive and first from outside the close-knit Gray family.
At the time of his exit, Mullins, who had a 10-year career with Neiman Marcus Group Inc. before joining St. John, said the switch from retail to wholesale apparel wasn’t what he expected.
Robert Gray reassumed the chief executive’s role, raising questions of when he actually would step back as he had hoped in bringing on Mullins. At the time, Robert Gray promoted Fetter to co-president alongside with his daughter.
The company, known for its luxury knit suits and couture dresses, didn’t consider recruiting a chief executive from the outside again, according to Robert Gray.
“St. John has found it difficult for someone from the outside to understand their business,” Gray said.
The company opted for co-chief executives because Kelly Gray and Fetter both have “different skill sets,” he said.
Kelly Gray is the company’s signature model and creative director in charge of merchandising, marketing and retail. According to financial reports, her compensation for the 12 months ended Oct. 28 was $917,000.
In addition to his role as co-president, Fetter also acts as chief operating officer. His compensation for the same period was $426,000.
The move could finally put to rest questions about who’ll fill the shoes of Robert Gray, long considered a tough act to follow.
The company has moved cautiously on the issue.
About six years ago, St. John, which was publicly traded at the time, saw its stock drop on news that Kelly Gray, then 29, was appointed to president. The stock rebounded in the course of the year.
In 1999, St. John was taken private in a management-led buyout backed by New York-based Vestar Capital Partners. The company cited its rocky relationship with Wall Street as one of the reasons for the move.
Robert Gray remained as chief executive throughout the shift.
Last year, when Mullins took on the role, St. John dismissed speculation that Kelly Gray was interested in the position.
For the 12 months ended Oct. 28, St. John’s sales were up 8.8% to $365.9 million. Retail took a hit after Sept.11, and the company wasn’t immune. It reported a 13.1% decrease in sales to $88 million for the 13 weeks ended Jan. 27.
The decrease was partially offset, according to St. John, by an increase in sales at company-owned retail stores. Same-stores sales increased 7.4% for the 13 weeks ended Jan. 27.
In company statements, Robert Gray said St. John will “focus its efforts on maintaining tight control over inventory levels and expanding its retail division.”
Last year the company opened two new boutiques in Troy, Mich., and Houston, bringing its total to 26. This year, St. John has plans to open five more company boutiques in San Francisco, Tampa and Orlando, Fla., San Jose and Short Hills, N.J.
It also operates 10 outlets stores and four home furnishing stores.
St. John counts about 3,000 OC workers at its headquarters and production facility near John Wayne Airport. The company sells clothing and accessories sold under the labels St. John and St. John Sport by Marie Gray (Gray’s wife and company co-founder). St. John lines include knitwear, sport, handbags, shoes, jewelry, fragrance and coats.
