Dive Brief:

• Crate & Barrel CEO Doug Diemoz, who had arrived from Restoration Hardware in 2015, is departing the company, the Chicago Tribune reports. 

• A company spokesperson declined to provide a reason for the departure when asked by the Tribune. Diemoz and another former Restoration Hardware executive at Crate & Barrel are at the center of a lawsuit filed earlier this year in which Restoration Hardware alleged its two former employees committed trade secret misappropriation and contract violations. 

• A company memo obtained by the Tribune said most of Diemoz's responsibilities would be taken over by Neela Montgomery, a board member at Crate & Barrel parent, the Otto Group. 

Dive Insight:

Crate & Barrel's executive suite has been in turmoil since the 2012 retirement of longtime CEO Barbara Turf. After the 2014 death of Turf, who was known for leading the company with creativity and flair, the company was without its rudder and abrupt leadership changes were made in 2015. 

Enter Doug Diemoz, who was hired to give Crate & Barrel — which boasts a solid reputation for affordable, European-style home goods and furniture — a new direction. Diemoz left his position as chief development officer at Restoration Hardware to become Crate & Barrel CEO in August 2015, recruiting Kimberly Ahlheim to join his team there last year. The suit filed by Restoration Hardware in early 2017 alleges that Diemoz and Ahlheim brought with them proprietary knowledge of the company's food and beverage operations, part of an experiment in Chicago to boost Restoration Hardware’s retail experience. 

While surely a selling point for Crate & Barrel, the expertise and insight that Diemoz gained at Restoration Hardware was taken too far, according to the lawsuit. "Crate was keenly ware of the high growth that RH has achieved due to its more innovative approach to the home furnishings industry. Lacking its own formula for growth, Crate set upon a business strategy of recruiting away key senior leaders … to help revitalize Crate’s flagging business," the lawsuit reads in part. "In particular, Crate launched a systematic strategy to recruit a new CEO in 2014 by targeting a list of senior management talent from RH. Rather than invent its own growth strategy, Crate effectively sought to steal a page from the successful RH playbook."

Beyond touting its own success, Restoration Hardware threw quite a bit of shade at its competitor: "In contrast to RH’s meteoric revenue growth since the Great Recession, competitor Crate ... has experienced little revenue growth during this same time period. Some public reports state that privately held Crate’s revenue in 2007 was $1.3 billion, and its revenue in 2013 was $1.38 billion, showing a long period of slow to no growth in revenue. ... Crate began targeting RH personnel and RH strategies as part of a strategy to turn around Crate’s inferior performance and growth."

Restoration Hardware is especially focused on its food operations, an effort led by Ahlheim during her time there. The retailer alleges that she was giving over secrets to her soon-to-be new employer while she was still at Restoration Hardware.

The focus on food in stores comes as retailers of all stripes are increasingly turning to food concessions to attract customers and provide an enjoyable experience that incentivizes them to linger at their stores: Target, Barnes & Noble, Kohl’s and Urban Outfitters have all tested various iterations of food concepts, from delis to upscale restaurants, to spice up their stores amid declining foot traffic as online shopping eats into brick-and-mortar sales. 

“I know that there are two parts of retail that cannot be duplicated on the internet: One is food and dining, and the other is entertainment," Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive last year.