Warnaco Ousts CEO Amid Its Restructuring
Longtime Warnaco Group Inc. Chairwoman and Chief Executive Linda Wachner, who transformed a once-sleepy bra company into a $2.25-billion apparel machine, was ousted Friday from the now-bankrupt firm.
Wachner will be “moving toward new business ventures” and will be replaced as CEO by Antonio C. Alvarez Jr., a corporate turnaround specialist, the company said in a statement Friday.
“With Warnaco’s restructuring process firmly underway, the board believes that now is the right time for a change in leadership,” Harvey Golub, chairman of the restructuring committee of Warnaco’s board of directors, said in a statement.
The company also said Stuart D. Buchalter has been elected to succeed Wachner as chairman of the board, effective immediately.
The shake-up came after Wachner, who served as CEO of Warnaco since 1987 and chairwoman since 1991, met with the board of directors Thursday night and Friday morning, sources with knowledge of the meetings said.
Warnaco didn’t reach a severance agreement with Wachner as part of her departure, company spokesman Robert Mead said.
During her reign at New York-based Warnaco, Wachner transformed the staid company into an apparel-making empire whose products range from Calvin Klein jeans to Olga bras and Speedo swimsuits. But in mid-1998, the company’s business began to unravel, hurt by a reduction in demand for its products and fast-eroding market share. A high-profile dispute with Calvin Klein, settled in January, also hurt its core licensed Calvin Klein jean and intimate-apparel businesses.
Wachner, 55, said she was “looking forward to new ventures.”
“I’m in good shape. The company is standing well,” she said.
Wachner had been one of the highest-paid executives in the U.S., earning more than $158 million in salary, bonuses and options from 1993 to 1999 for running Warnaco and Authentic Fitness Corp., a Warnaco subsidiary.
Her pay was slashed 59% in 2000 to $3.1 million as the company’s stock plunged 86%.
Commerce-based Authentic Fitness Corp., bought by Warnaco in 1999, is a licensee for the Speedo brand, as well as Oscar de la Renta and Ralph Lauren swimwear. Authentic Fitness also owns the Cole of California and Catalina swimwear labels and operates more than 100 Speedo Authentic Fitness stores in the U.S. and Canada.
Warnaco had losses in four of the last five years, and in the last four quarters it lost $420.7 million. Last year, the company eliminated 4,000 jobs, closed plants and wrote down the value of its inventory. In March, Warnaco said it would cut 1,000 jobs this year and close a factory in the Dominican Republic.
Shares of Warnaco rose half a cent to 13 cents on Friday in over-the-counter trading, down from a high of $44.38 in July 1998.
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Times staff writer Marla Dickerson contributed to this report. Associated Press and Bloomberg News were used in compiling it.
