Capri Holdings Ltd. made a surprising announcement on Monday, revealing that the CEO of Michael Kors, Joshua Schulman, would be stepping down.
Capri Holdings is the parent company to Michael Kors as well as Versace and Jimmy Choo.
There was no further information disclosed on the leadership change, however John Idol, the chief executive of Capri Holdings would remain with the company and its board.
Schulman, 50, is leaving the company just seven months after taking the reins of the luxury brand. He was also on track for a big promotion to take over Capri this September.
The sudden and unexplained reversal sent Capri’s shares down by more than 12% at $47.93 on Monday.
“We remain well-positioned to achieve meaningful long-term revenue and earnings growth as well as deliver increased value for our shareholders,” Idol said in a statement. “I am fully committed to continuing to lead Capri Holdings and driving our future success.”
Idol, 62, had been expected to give up the CEO title and become executive chairman in September.
Schulman was previously with Tapestry, where he is credited with turning around the Coach brand. He has also held senior positions at Gucci, Jimmy Choo and Bergdorf Goodman, where he was the president from 2014 to 2017.
“Sometimes those CEO-in-waiting roles are difficult to execute,” said one source who did not want to be identified. “From the outside looking in, business was good and Josh seemed happy.”
According to a regulatory filing, Schulman will continue to receive his $1.3 million base salary for two years as well as $5.2 million and a reduction in his non-compete obligations from two years to September 2022.
With this generous of a package, it is doubtful that Schulman’s departure involves “conduct-related disciplinary action,” wrote JP Morgan analyst Matthew Boss in a research note.
“Michael Kors has a talented management team in place that will continue to execute on its strategic initiatives,” Idol said in a statement Monday. “The Board and I remain extremely optimistic about the future growth of Michael Kors and Capri Holdings. We are grateful to Josh for his contributions to our organization.”
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.