Shares of fashion retailer Esprit plunged yesterday morning on rumors that Heinz Krogner is on the verge of vacating his chief executive post, then recovered in the afternoon after the company denied the rumors - which hours later turned out to be true.
Krogner told investors he's giving up his chief executive post no later than July 1.
He confirmed on a conference call that his successor as chief executive has been chosen. The replacement has already signed a term sheet and will probably sign his contract today, Krogner said.
The appointment will likely be announced tomorrow.
Krogner's successor as chief executive is a young guy who has been chief executive of an international retail chain for the past six or seven years.
The incoming Esprit boss' company operates 1,600 stores, with a lot of operations in South America, and brings in more than US$2 billion (HK$15.6 billion) a year.
Krogner also said the new guy is not a Yankee.
Esprit still has not put out an announcement containing the information from the conference call. The new chief executive will take up his post no later than July 1. Krogner said he has agreed to stay on as an executive chairman until as late as the end of 2010.
It's good news that uncertainty about the succession plan is being cleared up. But Esprit's bungled communication of the changes calls into question its corporate governance.
