Destination Maternity on Wednesday announced that Marla Ryan, "by mutual agreement with the Board," would step down as chief executive officer, effective Thursday. She's staying on to assist with the transition and will take a new role as president of product design, sourcing and merchandising, according to a company press release.
The board also created an interim "Office of the CEO," to provide leadership and oversight during their CEO search. That group includes Ryan, CFO-COO Dave Helkey and board member Lisa Gavales, who will be chair. Gavales was CEO of Things Remembered from 2014 to 2017.
The maternity apparel retailer on Wednesday also reported a dismal first quarter. Net sales plummeted 8.7% to $94.2 million, hurt by the net closure of 32 owned and 88 leased locations, and a 7.2% comp sales slide. Gross margin expanded 110 basis points year over year to 54.8%, but inventory rose by $5.7 million to $72.1 million. Net income was halved from $0.2 million a year ago to $0.1 million.
This latest game of leapfrog in Destination Maternity's top ranks comes as the ink was barely dry on Ryan's CEO contract, which she signed last November.
The company's c-suite has been in turmoil, to say the least. Ryan had been swept onto the board only five months before taking that job, when she and three other "dissident" nominees, put forward by activist investors, were elected. And that drama came just months after the company had replaced its CEO with yet another "Office of the CEO," in January of 2018. But the chief being replaced then had arrived just months before that, too, to replace then-CEO Anthony Romano amid that period's c-suite shakeup, following a failed merger with French retail and design company Orchestra-Prémaman.
The turnover has done little to help the company's long-running turnaround. Ryan had faced challenging questions from analysts in April, after a 5.8% fourth quarter comp decline, and had asked for patience, in part to allow the retailer to get through the difficult-to-sell inventory that she said the recently arrived executives hadn't been responsible for.