Dive Brief:
- Destination Maternity Corporation on Wednesday announced the appointment of Marla A. Ryan as CEO, effective immediately. She replaces Melissa Payner-Gregor, who had been serving as interim CEO since January and a director since August 2009 and is leaving to pursue other opportunities, according to a company press release.
- Ryan and three other "dissident" nominees of activist investors Nathan Miller of NGM Asset Management (who earlier tried to buy the company outright) and Peter O'Malley of Kenosis Capital Partners, were elected to the board the previous week.
- Ryan has more than 25 years of retail experience, including at Lands’ End from 2009 through 2017, where she most recently was senior vice president of retail. Before that, she held senior positions at J.Crew, including vice president of its Crewcuts children’s apparel division, and merchandising and management roles at Brooks Brothers, American Eagle, Abercrombie & Fitch and The Gap.
Dive Insight:
In the tug of war of the last few weeks, Miller and O'Malley prevailed. The investors earlier this month released an open letter to Destination Maternity shareholders lambasting the company's management, revenue and profit declines and ineffectual turnaround, and urged shareholders to replace members of the board.
And indeed, shareholders swept the board May 23, replacing members with, in addition to Ryan, Skullcandy co-founder Holly N. Alden, equity analyst Christopher B. Morgan and retail consultant Anne-Charlotte Windal. It was the "first time in recent corporate history that a majority of women dissident directors have won a proxy contest," according to Reuters.
The insurgency follows significant turmoil in the top ranks at the retailer, which calls itself the largest designer and retailer of maternity apparel. CEO Anthony Romano left last year, during a quarter of a nearly 8% sales decline and just after the hire of Berkeley Research Group to help turnaround efforts and better control finances. At the time of the Miller/O'Malley letter, the company was on its second interim CEO. The first replaced Romano following a failed merger with French retail and design company Orchestra-Prémaman, which in turn had initiated a turnover of board chairs.
The mess has hardly been lucrative. Last month the retailer landed on Retail Dive's list of 12 retailers at risk of bankruptcy this year. The activists said in their letter that their nominees would roll out a turnaround plan of their own designed to boost profits by "rationalizing inventory and cutting wasteful spending." That lack of specificity was fine for boardroom drama, but, now that they've won, Miller and O'Malley's team will have to deliver.
