Simpson Associates


St. Louis Business Journal – Poor Sales Could Spell Doom for May’s CEO Kahn

Poor Sales Could Spell Doom for May’s CEO Kahn

By Heather Cole

The yearlong sales slump at May Department Stores Co. is fueling speculation that President and Chief Executive Eugene
Kahn soon may be replaced.

Kahn, 53, has faced criticism as same-store sales declined for the last year at May. A high profile lawsuit by Bebe Stores Inc.
against May for trademark infringement for its proprietary brand “be” also hasn’t helped.

Despite a poor economy, some department store chains, such as J.C. Penney Co. and Kohl’s,
have been doing well, so May’s poor sales likely are management-related, said Terre Simpson
head of the New York-based retail executive search firm Simpson Associates.

“I think Kahn has a different way of doing business and it has not worked as effectively. The
proof in the pudding is in the results,” Simpson said. She said David Farrell, Kahn’s predecessor,
who retired in 1998, ran a much tighter ship with better results. “He numerically, strategically
managed the business and it was very profitable when it was run that way.”

Another possibility for internal selection would be presidents of divisions that have been
profitable, Simpson said. Department store companies don’t usually pick from the ranks of vice
presidents, she said. “The question becomes, is there a president in one of the divisions who has
the capability to run the whole business?”

“I think there has been a crisis for the last couple of years in terms of finding the talent necessary
to change some of these businesses,” Simpson said.

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