Tapestry CEO Resigns Amid Probe of Inappropriate Behavior (1)

Jide Zeitlin resigned suddenly as chairman and chief executive officer of Tapestry Inc. amid allegations of an inappropriate relationship with a woman before he joined the retailer.

The board hired law firm Fried, Frank, Harris, Shriver & Jacobson LLP to investigate claims made by the woman, according to a person familiar with the matter, who asked not to be identified discussing details of the probe. The woman said Zeitlin posed as a photographer more than a decade ago to lure her into a romantic relationship, the person said. The Wall Street Journal reported earlier on the allegations.

Jide Zeitlin

Source: Tapestry

Zeitlin, who had been in the CEO role for less than a year, said in a message to the company posted on LinkedIn that the allegations were true, but that the relationship ended 13 years ago and “had nothing to do with my role at Tapestry.” He said he did not use his power or position to further the relationship.

“I reached the conclusion this past weekend that this distraction will not allow me to meet my responsibilities as CEO,” Zeitlin said in the message to employees. “I hope you know how deeply I care about you and the company. The last thing I want is to add to the uncertainty each of you are already facing due to Covid-19 and the economic downturn.”

Joanne Crevoiserat, Tapestry’s chief financial officer and a former executive with Abercrombie & Fitch Co., was named interim CEO. Director Susan Kropf was named chair.

Representatives for Tapestry and the law firm didn’t immediately respond to a request for comment on the probe.

Executive Behavior

The abrupt change comes at a time when executive behavior is under a microscope. In the #MeToo era, transgressions that may once have been considered minor are no longer swept aside.

Last year, Steve Easterbrook was ousted as CEO of McDonald’s Corp. after news of a consensual relationship with a colleague. Earlier that year, Jerry Stritzke resigned as president and CEO of sportswear company Recreational Equipment Inc. over a “consensual relationship between the REI CEO and the leader of another organization in the outdoor industry,” the company said at the time.

The surprise departure comes at a volatile time for the parent of the Coach and Kate Spade brands, which is trying to navigate changing consumer tastes and the coronavirus pandemic’s effects on the retail market. It also marks a setback for Black representation in Corporate America, which has been trying to increase diversity at the highest ranks.

Tapestry, formerly called Coach, has sought to amass a portfolio of luxury brands to rival competitors like LVMH. It has struggled to gain traction with weaker parts of its portfolio, however, with Kate Spade in particular being challenged. In September, when Zeitlin stepped into the top role, he already had a turnaround effort on his hands. This has been exacerbated by Covid-19, with consumers swiftly moving away from luxury goods and discretionary spending.

Share Slump

Zeitlin took the reins amid a share slump that he was unable to reverse. Tapestry stock has declined close to 40% since he took over the top job in September of last year.

His departure shrinks the cohort of Black CEOs running S&P 500 companies down to five, according to available data. He previously was vocal on his experiences facing racism as a Black man and vocalized his support for the Black Lives Matter movement.

Todd Kahn, the company’s chief administrative officer, will serve as interim CEO and brand president of Coach, Tapestry said. Andrea Shaw Resnick, the head of investor relations and corporate communications, was named interim CFO of the company.

(Updates to include comments from Zeitlin beginning in first paragraph)

To contact the reporters on this story:
Kim Bhasin in New York at kbhasin4@bloomberg.net;
Jordyn Holman in New York at jholman19@bloomberg.net

To contact the editors responsible for this story:
Anne Riley Moffat at ariley17@bloomberg.net

Richard Clough, Jeff Sutherland

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