Brief

Crate & Barrel taps CEO from parent company Otto Group

Dive Brief:

  • Less than a month after the abrupt departure of CEO Doug Diemoz, Crate & Barrel on Thursday announced that Neela Montgomery would assume the role on Aug. 1, according to a press release.

  • Montgomery most recently was Executive Board Member at Crate & Barrel’s parent, Hamburg-based Otto Group, where she led its Multi-Channel Retail strategy. In her work with Otto Group, she was also instrumental in guiding Crate & Barrel somewhat, the press release stated.

  • Before that, she held several leadership roles during her twelve years at retail giant Tesco, including Chief Merchant for Tesco Malaysia, U.K. E-Commerce Director and U.K. General Merchandise Director on the U.K. Board of Tesco.

Dive Insight:

Montgomery has been instrumental in moving Crate & Barrel forward for years, but she’s been working from Germany as the U.S. furniture retailer dealt with turnover and turmoil in its top ranks.

The executive suite there has been in flux since the 2012 retirement of longtime CEO Barbara Turf. After the 2014 death of Turf, who was known for leading the company with creativity and flair, the company was without its rudder. That year, CEO Sascha Bopp and President Marta Calle abruptly departed just two years after their appointments.

In an interview with the German Retail Blog business news site two years ago, Montgomery said that some changes that Bopp and Calle made went too far, in particular their merchandising overhaul. “We changed the promotional strategy and went to a much lower promotional cadence, which helped the business,” she said. “[Bopp and Calle’s team] did — for very good reasons — want to modernize the brand, so they modernized the merchandise.”

But that was an overreach that caused Crate & Barrel to lose more loyal customers than it gained, she said. “So we needed a course correction, but we still need to innovate and modernize more. That was the challenge that I gave to the new CEO.”

Enter Doug Diemoz, who was hired to give Crate & Barrel — which boasts a solid reputation for affordable, European-style home goods and furniture — a new direction. Diemoz left his position as chief development officer at Restoration Hardware to become Crate & Barrel CEO in August 2015, recruiting Kimberly Ahlheim to join his team there last year — a move that precipitated a lawsuit by their former employer. Restoration Hardware, in early 2017, alleged that Diemoz and Ahlheim brought with them proprietary knowledge of the company's food and beverage operations, part of an experiment in Chicago to boost Restoration Hardware’s retail experience. 

While surely a selling point for Crate & Barrel, the expertise and insight that Diemoz gained at Restoration Hardware was taken too far, according to the lawsuit. "Crate was keenly ware of the high growth that RH has achieved due to its more innovative approach to the home furnishings industry. Lacking its own formula for growth, Crate set upon a business strategy of recruiting away key senior leaders … to help revitalize Crate’s flagging business," the lawsuit reads in part. "In particular, Crate launched a systematic strategy to recruit a new CEO in 2014 by targeting a list of senior management talent from RH. Rather than invent its own growth strategy, Crate effectively sought to steal a page from the successful RH playbook.”

In her statement Thursday, Montgomery indicated that the retailer is ready to move on. “Crate and Barrel is a strong brand, a great company and a team of wonderful people,” she said. "I am looking forward to developing the company further by taking over not only strategic, but now also operational responsibility.”

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Filed Under: Corporate News