Michael Kors’ chief executive is leaving the company just seven months after taking the reins of the luxury brand — and despite the fact he was on track for a big promotion.
Joshua Schulman is stepping down despite having been poised to take the helm of Capri Holdings, the owner of Michael Kors, Jimmy Choo, and Versace, from the holding company’s current CEO, John Idol, in September, the company announced last year.
The sudden and unexplained reversal sent Capri’s shares down by more than 12% at $47.93 on Monday.
“We remain well-positioned to achieve meaningful long-term revenue and earnings growth as well as deliver increased value for our shareholders,” Idol said in a statement, adding, “I am fully committed to continuing to lead Capri Holdings and driving our future success.”
Idol, 62, had been slated to give up the CEO title and become executive chairman in September.
Schulman, 50, was named CEO of Michael Kors in August after stints with Tapestry, where he is credited with turning around the Coach brand. He has also held senior positions at Gucci, Jimmy Choo and Bergdorf Goodman, where he was the president from 2014 to 2017.
There is no indication that Schulman was forced out of Capri and industry insiders were surprised by the announcement on Monday.
“Sometimes those CEO-in-waiting roles are difficult to execute,” said one source who did not want to be identified. “From the outside looking in, business was good and Josh seemed happy.”
According to a regulatory filing, Schulman will continue to receive his $1.3 million base salary for two years as well as $5.2 million and a reduction in his non-compete obligations from two years to September 2022.
Given the generous severance package, it’s less likely that Schulman’s departure involves “conduct-related disciplinary action,” wrote JP Morgan analyst Matthew Boss in a research note.
His unexplained departure from Capri follows on the heels of a top Ralph Lauren executive — Howard Smith — who was ousted from the company last week for alleged violations of the company’s ethics code.
Smith was the brand’s executive vice president and chief commercial officer. On Feb. 28, Estee Lauder ousted a veteran top executive, executive group president John Demsey, for an inappropriate Instagram post in which he used a meme containing the N-word and joked about COVID-19.
“Michael Kors has a talented management team in place that will continue to execute on its strategic initiatives,” Idol said in a statement Monday. “The Board and I remain extremely optimistic about the future growth of Michael Kors and Capri Holdings. We are grateful to Josh for his contributions to our organization.”
Last year when Schulman joined the company, Idol said in a statement, “Josh’s appointment is part of a thoughtfully planned leadership succession. Over the course of the next year, Josh will immerse himself in the Michael Kors brand. The board and I are confident in Josh’s unique abilities to lead Capri Holdings.”
A Capri spokesperson and Schulman couldn’t immediately be reached for further comment.