What Happens After Founders Step Aside

The new chief executive of Savage X Fenty isn’t a musician, actress or global fashion icon.

But Hillary Super’s resumé — which includes leadership stints at Guess, American Eagle Outfitters and Anthropologie, where she’s credited with growing the brand’s digital business and launching plus-size fashion — is packed with the sort of less-glamorous skills a young fashion brand needs. (Super was announced as CEO last month; Rihanna will remain Savage x Fenty’s executive chair.)

The transition from iconoclastic founder to seasoned executive is a familiar part of the life cycle of many fashion and beauty companies. But it’s been happening more lately: the upheaval of the pandemic, the DTC boom-to-bust and a turbulent economy have convinced entrepreneurs to hand over the reins. In addition to Savage X Fenty, founders of The RealReal, Glossier and PrettyLittleThing have stepped aside in roughly the last year, among other companies.

What happens after an iconic leader departs can be difficult to predict.

Sometimes it’s smooth: Jeff Bezos’ 2021 handoff to his successor, Amazon veteran Andrew Jassy, has appeared to go off without much of a hitch for the past couple of years. Other times it’s bumpy: Katrina Lake exited the CEO role at Stitch Fix in 2021, only to briefly return 17 months later after her successor failed to reverse sliding sales. Some are a bit of both — Ralph Lauren hand picked former Gap and H&M executive Stefan Larson as his successor, but the two clashed and Larson was out in under two years. Patrice Louvet then took the helm, a role he’s held for a relatively smooth six years.

What separates the good transition from the bad, experts say, often hinges on a few key factors: the circumstances around the founder’s departure, and whether the new CEO brings new skills to the table rather than merely trying to replicate the founder’s magic. And if the founder does stay involved — common at start-ups where they still have a majority stake, with or without the top job — what role they play.

It’s too early to say which path Savage X Fenty is on. Rihanna may now be free to deliver more of her star power, style acumen and creative vision to the brand, experts say. Or, a new executive team — both of Savage x Fenty’s co-presidents appear to have moved on along with Rihanna — could set the business on a less favourable trajectory.

Here, BoF unpacks what happens when founders step aside.

Why do founders leave?

Founders typically pass the baton when a company is at a transition point, whether it’s an initial public offering or an acquisition, or a rough patch that requires a tough-to-execute pivot to escape.

When founders go willingly, the transitions tend to be more successful, said Simeon Siegel, managing director and senior analyst specialising in retail and e-commerce at BMO Capital Markets.

“When the idea comes from them … it tends to be the most seamless,” he said.

More often than not, founders stay on too long “because the business they have created is their baby,” and “they are intent upon remaining completely in control,” said Mark Cohen, director of Retail Studies at Columbia Business School.

Rihanna’s decision to step aside at this juncture — the brand’s annual revenues are estimated to be close to or approaching the hundred-million mark and the company is rumoured to be readying for an IPO at a $3 billion valuation — is more “proactive” than many of her counterparts in fashion and retail, said Karen Harvey, founder and CEO of business consultancy and executive search firm Karen Harvey Consulting Group.

And of course, not all departures are entirely voluntary.

When a business is in peril, a company’s board, investors or executives may put pressure on a founder to leave. That can come in the form of an ultimatum, or a softer pitch that leads the founder to recognise they “no longer have a desire to deal with the myriad of issues” that come with turning a flagging business around, Cohen said.

Glossier founder Emily Weiss stepped down last year amid flagging sales and persistent roadblocks in its DTC-only business model. The RealReal founder Julie Wainwright also departed in 2022 after the company’s stock had fallen by more than 80 percent.

Sometimes founders leave suddenly and unexpectedly: In June 2020, Reformation founder and CEO Yael Aflalo stepped down from the company days after allegations of racism surfaced on social media from past employees. In 2019, Steph Korey, CEO and co-founder of luggage start-up Away, resigned after allegations she created a toxic company culture. (She returned in 2020 before resigning for a second time that same year.)

How can brands plan a successful handoff?

Ideally, companies aim to find a replacement who brings different skills than the founder — rather than trying to replicate the often one-of-a-kind attributes and circumstances that made the business initially successful.

“The important thing is to not hire someone to do exactly what [the founding CEO] had been doing,” Harvey said.

Often that means swapping a visionary entrepreneur for someone with a proven track record for scaling a business, she said. The new CEO is often tasked with creating strategy around geographical expansion, hiring and retention, cost savings and carving out new functions or departments.

At Glossier, for example, Emily Weiss grew her blog into a thriving cosmetics brand. But when sales began to slip, she was succeeded by Kyle Leahy, who had experience at Cole Haan and Nike. Under Leahy, Glossier has entered wholesale for the first time, among other strategic pivots.

When Patrik Frisk replaced Under Armour founder and CEO Kevin Plank in 2020, it was after a stretch of stagnant revenues and a string of negative headlines about Plank’s leadership style, including allegations that gender discrimination and other workplace toxicity ran rampant at the brand. Frisk, a Swedish-American businessman, was brought in as a classic operator, having previously been chief executive of footwear group Aldo and president of VF Corp.’s outdoor division.

How can founders stay involved?

For fashion companies in particular, it’s often unwise to completely do away with the magic the founder brought. Even if the incoming CEO is a whip smart operator, their fashion retail acumen could be just as critical as their strategic skills, Harvey said.

“Without taste, and without a little bit of that merchandising acumen, it almost never works,” said Harvey.

Companies should strike the right balance between “a financial match” — a critical factor when a business needs to scale — and a “cultural match,” which will be important immediately and for the long term, Siegel said.

A founder’s post-transition role usually comes down to how closely they are associated with a brand’s identity. Ralph Lauren served as chief executive of his eponymous brand for nearly five decades, but now as chief creative officer his remit is squarely focused on the vision and creative direction.

In Rihanna’s case, “it’s hard to imagine that what [she] brings to the brand, she’s going to stop bringing to the brand,” Siegel said.

The most prominent argument in favour of founders remaining in control is that no one fights harder for their company’s success than a founder, he said.

In some cases, founders who hang up the CEO hat may give themselves a new or niche title that allows them to serve as the “creative brain” while a business operator oversees financial performance and strategic objectives.

Keeping a founder around — for creative or other reasons — can be a risky approach, however. Founders who remain on board as an executive chairman or in other high-level board positions can continue to exercise control over a business — in some cases, their authority trumps that of the new CEO.

“Founders will often hold onto their original thinking, and may have a preciousness about certain things that actually hinder growth,” Harvey said. “Sometimes they don’t believe anyone else could do what they do.”