According to a recent security filing, the struggling retailer Fossil has engaged Ankura Consulting Group for interim CFO services following the sudden departure of its finance chief and treasurer, Sunil Doshi. The Texas-based retailer appointed Ankura managing director Andrew Skobe as its interim finance chief, effective immediately. Doshi’s sudden exit comes mere months after Fossil also lost its long-time CEO and chairman, Kosta Kartsotis, after over two decades of service at the helm.
Interim leadership has become an increasingly popular choice in recent years, with businesses looking for interim and part-time leaders who can effectively bridge the gap between two eras of leadership and help to maintain a precedent of quality and momentum for the new leader coming in.
Skobe will step into Fossil’s leadership team and attempt to implement the first steps of the brand’s Transform and Grow (TAG) strategy. This planned strategy stems from Fossil finding itself out of step with the current marketplace and striving to find ways to reduce internal costs to salvage what remains of the brand’s viability and legacy. TAG began in 2023. Despite this, Fossil is continuing to face significant financial challenges following a disappointing 2023 and a disappointing start to 2024.
According to full-year 2023 earnings published in March, Fossil saw great losses in the fourth quarter of last year. The company’s net loss widened to $28.2 million compared to $9.4 million in the prior year during this period, with net sales for Q4 declining by nearly 16%. For the full year, its net loss ballooned to $157 million compared to $44.2 million the previous year.
Interestingly, the announcement that Fossil’s long-time CEO would be stepping down came in a separate March press release, on the exact same day that these full-year results were revealed. The company appointed its Chief Operating Officer, Jeffrey Boyer as interim CEO. Kohl’s CEO Kevin Mansell was tapped as board chairman, with Kartsotis to remain in a transitional role through September of this year. Boyer has played a key role in executing Fossil’s TAG strategy.
In other executive shifts, Fossil also eliminated key roles such as that of Chief Human Resources Officer. This is allegedly a part of the TAG strategy, according to an April filing with the Securities and Exchange Commission, but the viability of this remains to be seen.
The TAG plan aims to drive $300 million in operating income benefits by next year, according to Fossil’s Q1 2024 earnings report, with the plan generating $125 million in operating income benefits for 2023.
For its Q1 2024 ended March 30, Fossil reported net sales of $255 million, a 22% decrease on a reported basis year-over-year. The retailer’s net loss for the quarter totaled $24.3 million, compared to $41.3 million for the prior year period. Fossil expects its TAG plan to generate additional annualized operating income benefits of at least $100 million in 2024, with associated restructuring costs expected to be $35 million for the year compared to $49 million in 2023.
But Fossil appears to believe changes are far from over as the company continues to conserve spending and finally put itself in the green. The company’s 2024 outlook, released recently, shows the retailer hopes for net sales of approximately $1.2 billion throughout this year. Time will tell if this is an accurate projection.
