The ‘Visionary’ Thing: Shake-Up at Mossimo
Fashion designer Mossimo Inc. said Thursday that founder Mossimo Giannulli is giving up his chief executive and president jobs, handing them to turnaround specialist John Brincko in a move to stabilize the management of the deeply troubled company.
Brincko joined Mossimo as a consultant in January and immediately went to work to curb mounting losses by eliminating jobs, slashing salaries, restructuring management and putting the company’s Irvine Spectrum headquarters up for lease.
In a statement, Giannulli said Brincko’s vast experience will allow him to focus on the design, image and marketing of the company. Giannulli did not return phone calls seeking comment.
In making Brincko an officer of the company, Giannulli remains chairman and is taking on a new job: “Visionary.” But he is not yielding control, however. Giannulli owns 70% of Mossimo’s shares.
“The new title says it all,” Brincko said Thursday. “He’s an exceptionally creative individual who is going to be deeply involved in the vision of this company for the future.”
In the near term, Brincko is charged with fixing the mistakes of the past. The company also reported Thursday that it lost $13.5 million, or 90 cents a share, in the fourth quarter--in line with a forecast it put out last month. Sales in the period ended Dec. 31 plunged 52%, to $12.8 million.
For the year, Mossimo lost $18.7 million, or $1.25 a share, compared with a $10.7 million profit, or 72 cents a share, in 1996. Annual sales slumped 35%, to $70.9 million.
In a conference call with analysts, Giannulli and Brincko said they expect Mossimo to post an annual loss in 1998, but smaller than the one reported Thursday. They did not provide estimates.
The company is attempting to recover from a poorly executed attempt to make the transition from a designer of beach and casual apparel sold in surf shops and specialty stores to an upscale designer of men’s and women’s wear sold in department stores.
Brincko, 55, has 18 years of experience dealing with troubled companies. He has been involved in two of the largest bankruptcy cases ever filed in Southern California, Knudsen Foods in the 1980s and Bakersfield agribusiness giant Sun World International in the 1990s. In both cases, Brincko helped restructure the companies, which were eventually sold.
Brincko has clashed with executives of several of the troubled companies he’s been brought in to fix, including SunWorld Chairman Howard Marguleas.
“In the heat of doing what you have to do, it’s not unusual for there to be tension with the old management team,” Brincko said Thursday. “But ultimately, when you do the jobs that you’re supposed to do and it get completed, there’s a great respect there.”
Before joining Mossimo, Brincko spent two years at Barneys New York, where he had an unusual title of his own: senior Chapter 11 restructuring officer. He later became president and chief operating officer. At Barneys, Brincko was paid $65,000 a month plus a housing allowance under a one-year contract.
Brincko wouldn’t say if he signed an employment contract with Mossimo, or how long he planned to remain the company’s chief executive. He was not elected to the board of directors.
“I think the company and the brand have enormous potential that has yet to be tapped,” Brincko said.
Mossimo shares were unchanged at $4.50 Thursday in trading on the New York Stock Exchange.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Profile: John P. Brincko
Title: President/CEO
Age: 55
Background: Formed Brincko Associates Inc., an international management consulting firm, in 1979. Has restructured financially troubled companies in a variety of industries, including Barneys New York, Sun World International, Sahlen Enterprises, Knudsen Foods, Foremost Dairies and Winn Enterprises. Joined Mossimo in January.
Education: Bachelor’s degree in accounting, Bernard Baruch School of Public and Business Administration at City University of New York
Residence: Santa Monica
Personal: Married, three children
Source: Mossimo Inc.
