Maybe the shoes of Stein Mart (NASDAQ: SMRT) founder Jay Stein were simply too big too fill, but after just six months on the job, his successor, Dawn Robertson, has quit without explanation. Understably, shares of the regional department store chain tumbled 16% on the news.
Maybe she just wasn't right for the job. When Robertson was hired, it wasn't the CEO position she was going after, but rather chief merchandising officer. According to the Jacksonville Business Journal, Stein was so impressed with her during her interview that he instead offered her his job. She got the CMO spot too, and a seat on the board of directors.
Robertson had been CEO of Deb Shops, which filed for bankruptcy in 2014, and had also held executive-level positions at Gap's Old Navy chain, Saks, and elsewhere. Certainly she had the skills necessary to run the retailer. In its announcement of her departure, Stein Mart said, "Some of the sales initiatives that have been developed under Dawn's leadership are important for our future and we will continue to cultivate them to drive sales in this challenging retail environment," but they were apparently implemented too quickly, apparently confusing it customers, and results were too slow to materialize. Stein Mart also warned third-quarter comparable-store sales would be down 4% from the year-ago period.
Robertson was hurrying to attract younger shoppers to Stein Mart to boost sales, and said during the quarterly conference call last month that the retailer was "aggressively growing our activewear business in all stores and presenting a modern assortment in 60 stores to attract and grow a new customer demographic."
That may have been too much for the existing customer base and the board to handle. Stein Mart said the effort stumbled through August and has slightly improved this month.
"It is important that we remain focused on meeting the needs of our existing customers as we drive change," said Stein Mart President and COO D. Hunt Hawkins, who has been named interim CEO until a permanent replacement for Robertson can be found.
Doing too much, too soon can alienate a retailer's core shopper, as J.C. Penney discovered after appointing former Apple store executive Ron Johnson to its top job. He attempted to remake the stodgy retailer into a department store version of the technology company, and though many of his ideas were sound, the dramatic shift alienated its loyal customers, and the chain was brought nearly to financial ruin.
Stein Mart may not be on the verge of financial collapse, but a too-drastic alteration in its style apparently has had the same effect on it.
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Rich Duprey has no position in any stocks mentioned.