Fossil Group CEO steps down amid pressure from activist investor; shares surge
By Mike Murphy
Shares of fashion conglomerate Fossil Group Inc. jumped 8.5% in after-hours trading Wednesday after Kosta Kartsotis stepped down as chief executive and the company announced a strategic review amid pressure from an activist investor.
Fossil (FOSL) - which owns brands such as Fossil and Zodiac and licenses brands such as Kate Spade, Michael Kors and DKNY - said Jeffrey Boyer, the company's chief operating officer since 2021, has been appointed interim CEO and will join the board. Fossil's board has hired an executive search firm to find a permanent successor.
Kartsotis' departure as CEO is effective immediately, Fossil said. He will also give up his board seat, but will remain with the company to aid in the transition until September, and will continue to provide consulting services until September 2025.
Independent director Kevin Mansell was also appointed chairman of the board. "We have great confidence in Jeff to guide the company through this period of transition as we undergo a strategic review, continue to advance our Transform and Grow Plan and pursue our search for the company's next CEO in our effort to create long-term value for our stockholders," Mansell said in a statement.
In February, activist investor the Buxton Helmsley Group called for a shakeup at Fossil. "Given the board's abysmal judgement and failure to oversee management for years, the need for immediate change at Fossil is abundantly clear," Alexander Parker, senior managing director at BHG, said at the time.
Last week, Fossil reported narrower losses in its fourth quarter, but revenue fell and the company said it expected sales to decline between 12% and 17% in the current quarter.
Fossil shares have slumped more than 40% year to date, and are down 75% over the past 12 months.
-Mike Murphy
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03-13-24 2106ET
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