St. John Knits Chief Executive Resigns

The first outsider to head upscale women’s clothier St. John Knits International Inc. has resigned after just eight months on the job, prompting co-founder Robert E. Gray to again assume the chief executive post.

The departing CEO, former Neiman Marcus executive Hugh Mullins, resigned because the transition from retail to wholesale “was not what he anticipated,” the company said in a statement.

Robert Gray, 75, declined to elaborate. Mullins could not be reached for comment.

Gray, who had remained chairman of the Irvine company after Mullins became CEO, had planned to retire at the end of the year. He said he now expects to continue working 25 to 30 hours a week, as he has been since Mullins assumed the top job in February.

Daughter Kelly Gray and Bruce Fetter, executive vice president for operations, will run the company as co-presidents, Gray said. Co-founder Marie Gray remains as head designer.

Kelly Gray, the company’s signature model, also remains in charge of merchandising, marketing and retail.

Robert Gray said it is not clear yet whether his daughter eventually will become chief executive, as once had been anticipated. “That possibility is out there,” he said.

St. John designs and manufactures women’s clothing.

It also operates 24 boutiques and 10 outlet stores. St. John Home, a subsidiary, operates four home-furnishing stores.

The company, citing the sluggish economy, posted lower net income and sales for the third quarter ended July 29. Net income fell 32% to $3.8 million on a 2.5% decline in sales.