L.A. Gear CEO Greenberg Says He’ll Step Down : Management: The co-founder of athletic shoe manufacturer will be replaced by Stanley P. Gold.
Robert Greenberg announced Sunday that he is stepping aside as chairman and chief executive of troubled L.A. Gear, the latest in a series of executive suite changes designed to bolster the sneaker maker’s slipping fortunes.
Greenberg, a co-founder of the nation’s third-largest athletic shoe manufacturer, will be replaced by Stanley P. Gold, the general partner of Trefoil Capital Investors, which purchased a 34% stake in L.A. Gear last May for $100 million. The change is effective immediately.
Gold, a shrewd, tough-talking executive with a reputation for turning around companies on the brink of disaster, had been widely expected to take over the helm of L.A. Gear after the company continued to flounder in the months following Trefoil’s investment.
Greenberg, who remains L.A. Gear’s single largest individual investor, said in a prepared statement that he recognizes the company’s need for “assistance in a number of areas” and felt fortunate to have found it in the financial backing and business acumen from Trefoil.
Greenberg also singled out the hiring of Mark Goldston last October as the company’s president and chief operating officer as another key move toward building a new management team at L.A. Gear.
“After eight years of constant involvement with L.A. Gear, I can now devote more time to my family,” the 51-year-old Greenberg said. “I now look forward to taking some time off.”
As co-founder and chief executive, Greenberg guided L.A. Gear from its origins as a maker of trendy sneakers for teen-age girls into an athletic shoe powerhouse that at its peak in 1990 had sales of more than $900 million.
However, even as the company was enjoying its peak sales, its operations were beginning to suffer from a variety of ills. These included a worsening economy, the intensifying competition from market leaders Nike and Reebok and poor marketing decisions by L.A. Gear executives that left the company serving neither the fashion end of the athletic shoe business favored by women and younger consumers nor the “high performance” athletic segment favored by teen-age boys.
As a result, sales began softening in the final months of 1990 and hit the skids last year. In the first nine months of the company’s 1991 fiscal year, it lost nearly $28 million, contrasted with a profit of $39 million the year before. Sales in the first nine months of 1991 were $537.5 million, about 25% below the $713 million recorded in the prior year. The company has not yet reported results for the full 1991 fiscal year, which ended Nov. 30, but it warned investors months ago that the final quarter would be weak.
Gold brings to L.A. Gear a long and successful record of resuscitating ailing companies on behalf of Trefoil and its principal shareholder, Roy O. Disney, vice chairman of the Walt Disney Co. and the nephew of Disney’s legendary founder.