Patrick Guido, CFO of activewear brand Lululemon Athletica, will leave his post on May 8, 2020, the company announced Thursday. Guido, CFO since 2018, will depart to become CFO of auto retailer Asbury Automotive Group effective May 11, MarketWatch reported Friday.
While the company begins the search for a replacement, Senior Vice President of Financial Planning & Analysis Meghan Frank and Vice President and Controller Alex Grieve will lead the finance team, reporting to CEO Calvin McDonald.
"Of any time to lose a CFO, now is the worst," Neil Saunders, managing director of research agency GlobalData Retail, told CFO Dive. "In this crisis, you need a very firm grip on finance and the balance sheet. You need an expert."
McDonald expressed his confidence in Lululemon's leadership team and the strength of its business model. "We are fortunate to have two leaders, Meghan and Alex, who are well prepared to take on expanded responsibilities and lead the finance organization on an interim basis," McDonald said.
Frank and Grieve are "enabling us to effectively navigate COVID-19 while continuing to invest in our Power of Three growth strategy," he said. "We are confident Lululemon will attract an experienced CFO who has successfully guided a broad-based portfolio."
Earlier this month, Lululemon announced all senior leadership would be taking a 20% pay cut for at least three months, and the board of directors would forgo its cash retainer.
"These funds will go towards the newly-established We Stand Together Fund to help Lululemon employees facing COVID-19 related hardships," McDonald said.
Lululemon has closed its stores in Europe, the United States, Malaysia, Australia and New Zealand amid the pandemic, which is wreaking unprecedented havoc on retail.
Several other industry executives are on the move, including Paula Price, CFO of Macy's, who announced her departure on April 7. "[Guido's] is the latest in a string of moves, and I suspect it won't be the last," Saunders said.
But unlike Macy's, which is scrambling to shore up its finances, Saunders thinks Lululemon can weather the crisis well.
"They have a reasonable balance sheet, and it's a very strong brand, though it's losing some sales from not being open," he said. "But it is, like any other retailer, going to suffer challenges. There are many more tough positions ahead, including how they pay staff amidst capital expenditure cuts."
Lululemon will now be forced to adjust its balance sheet without its CFO at the helm, which Saunders predicts will be painful.
"A retailer like Macy's is used to making cuts, and it's been on the retreat for a while," he said. "Retailers like Lululemon haven't had to worry; they've been able to spend quite freely. They'll now have to change their stance a bit, which can be a shock to the system for a very successful brand."
Saunders cautioned other retail executives to ensure they have "some really good financial expertise in place," and that the people in those roles are "very secure."
"Now is the time when you really need people who can manage finances very well, and who are very good at forecasting, and understand the financial implications of the crisis," he said.
Additionally, because the parameters of the pandemic are so uncertain, and constantly changing shape, retailers will need a scenario planning expert on board.
"Finance is the most important role in the retail business right now," Saunders said. "Marketing you can still do, store management is not needed when stores aren't open, CEOs need to guide strategy, but much of the success and failure in this crisis will depend on managing finance."
Saunders emphasized to "make sure you have someone great in place, and you're looking after them, because you don’t want to lose them in this moment."
Lululemon's search for its next CFO will begin immediately and will include both internal and external candidates.