Goldston Steps Down as President of L.A. Gear : Executives: His departure comes with the No. 3 maker of athletic shoes poised to rebound.
L.A. Gear, once one of the hottest athletic shoe businesses that ran into trouble in the early 1990s, announced Wednesday that Mark Goldston has resigned as president.
Goldston, 39, was hired in 1991 to engineer a turnaround at the Santa Monica-based company. Although L.A. Gear had only one profitable quarter during Goldston’s tenure, he is credited with preparing the firm for a rebound.
He left to become a managing director of Burbank-based Shamrock Holdings Inc., an investment partnership controlled by the Roy E. Disney family and Stanley Gold, chairman and chief executive of L.A. Gear.
William Benford, 51, L.A. Gear’s chief financial officer, has succeeded Goldston as president.
L.A. Gear also announced Wednesday an agreement under which Wal-Mart Stores Inc. will buy a minimum of $80 million in the company’s footwear in each of the next three years.
Goldston decided to make the move to Shamrock now because he believes the Wal-Mart deal will help stabilize the company, said Clifford Miller, another managing partner at Shamrock.
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L.A. Gear, the nation’s fastest-growing athletic shoe company in the 1980s, began to slide in 1990 because of marketing gaffes, excessive distribution and a poorly performing apparel division. It currently ranks third behind Nike and Reebok, with about 6% of the athletic shoe market.
The company had a loss of $3.9 million in the first quarter of 1994 and expects a second-quarter loss of $13.7 million.
However, Chairman Gold said Goldston has helped put L.A. Gear on the proper track. Under Goldston, L.A. Gear in 1993 introduced its strong-selling L.A. Tech line, shoes with heels that flash lights when foot pressure is applied.
“We have made substantial progress during this period to focus the company and positively position the various L.A. Gear footwear brands in a very competitive marketplace,” Gold said.
Industry analysts agreed that Goldston set the stage for the company’s revival.
“He put in place a plan to bring more value-oriented footwear to L.A. Gear,” said Mark Friedman, an analyst at Goldman Sachs in New York. “He started to implement a turnaround plan, but he has not completed the turnaround. I expect to see an improved performance by the company in the second half of the year.”
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Gary Jacobson, an analyst at Kidder Peabody in New York, said he expects L.A. Gear to have a profitable second half and predicts that the company will break even for the year.
“Goldston did an excellent job,” Jacobson said. “Without him, the company would not have survived. He reinvigorated their product lines and reduced expenses.”
In his new role, Goldston will help Shamrock identify investment opportunities.
Goldston, a former marketing executive at rival Reebok International, was an executive at a New York-based investment partnership called Odyssey Partners before joining L.A. Gear.
L.A. Gear stock closed Wednesday at $7, up 25 cents on the New York Stock Exchange.
