(Bloomberg) -- Ralph Lauren Corp. hired Patrice Louvet as its next chief executive officer, tasking a Procter & Gamble Co. veteran with leading a difficult turnaround at the preppy apparel brand.
Louvet will take the reins on July 17 and join the board, the company said on Wednesday. The CEO will report to the fashion house’s eponymous founder and executive chairman, suggesting that the 77-year-old Ralph Lauren will maintain a key role at the business.
The previous CEO, Stefan Larsson, had disagreed with the founder over creative decisions. That hampered efforts to turn around a business that’s struggling with heavy discounting and sliding sales. Ralph Lauren signaled that Louvet’s tenure may have a more cooperative spirit, praising Louvet’s “collaborative working style.”
“Finding the right partner to work with me to take us forward in our evolution has been my primary focus over the last several months,” Lauren said in a statement.
In choosing Louvet, the company is turning to a French native who spent more than 25 years at P&G, the world’s largest consumer-products maker. He most recently ran the global beauty business, a division with $11.5 billion in sales. P&G offloaded a large swath of its beauty business to Coty Inc. last year in a $12.5 billion deal.
Louvet previously oversaw P&G’s Gillette lineup and its prestige division, which included fashion brands such as Gucci and Hugo Boss. Before joining P&G in 1989, Louvet spent 1 1/2 years as an officer in the French Navy.
The pick failed to comfort Wall Street. The shares fell as much as 3.3 percent to $71.51 in New York trading Wednesday, reaching its lowest level since July 2010. The stock had already declined 18 percent this year through Tuesday’s close.
The tepid reception could mean that “investors expected someone with a slightly different professional background, and more meaningful track record in apparel and the fashion industry,” said Chen Grazutis, an analyst at Bloomberg Intelligence. “That doesn’t mean he can’t be very successful in this role.”
Ralph Lauren has been seeking a new CEO since the abrupt announcement in February that Larsson was leaving. Chief Financial Officer Jane Nielsen served as interim chief during the search.
Louvet is getting a big raise after his P&G job. He’ll collect a $1.25 million annual salary, according to a regulatory filing. Louvet also is eligible for a yearly target bonus of $3.75 million and equity grants worth $7.5 million, both depending on company performance.
The target package is more than twice as high as what he received in his last full year at P&G.
Louvet will also get sign-on awards worth about $12.6 million this year, including $3.38 million in cash. The remainder comes in shares, of which $6.59 million vest if the company achieves certain financial goals and $2.6 million vest after five years regardless of performance. His contract also gives him a $30,000 allowance to pay for his children’s schooling and six weeks of vacation.
Louvet’s compensation resembles that of his predecessor. Larsson also had a $12.5 million annual target compensation and got about $11.9 million in sign-on awards, including cash and stock linked to performance goals and continued service.
Ralph Lauren’s last CEO had taken over from the founder in November 2015 and proceeded to shake up management ranks, cut jobs and shutter stores. Larsson had previously worked at H&M and Old Navy, chains known for quickly responding to trends and delivering apparel that’s meant to be both chic and cheap. Ralph Lauren, in contrast, has focused on designs that are created with less input from the outside world.