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How CFOs Became One of Fashion’s Most In Demand Roles

Allbirds, Stitch Fix and Burberry have all named new finance chiefs this month alone as the role becomes increasingly demanding and in-demand.
Allbirds is among the fashion companies to have named a new finance chief during the past month.
Allbirds is among the fashion companies to have named a new finance chief during the past month. (Getty)

Key insights

  • Roughly 50 large fashion companies, including LVMH Fashion Group, MatchesFashion and Skims, have named new chief financial officers in the past year.
  • The pandemic, high inflation, slowing growth, rising interest rates, brick-and-mortar consolidation and the Silicon Valley Bank crisis have all contributed to the role becoming more crucial and demanding.
  • Fashion companies will need to balance their need for CFOs to be highly experienced with the expectation that these leaders are nimble enough to adapt to a new consumer landscape.

Kirby Perkins, managing director at Crist Kolder Associates, an executive search firm specialising in the chief financial officer role, can’t recall a busier time at the company.

“The market for exceptional finance talent is white hot,” Perkins said. “It started with Covid when companies found themselves in a position where they really needed a top notch finance executive to make it through.”

In the past year, 50 fashion companies — LVMH Fashion Group, MatchesFashion and Skims among them — have named new finance chiefs, according to Kirk Palmer and Associates, an executive search firm. This month alone, Allbirds, Stitch Fix and Burberry swapped out their CFOs. Asos has shuffled through two interim CFOs since October.

While each situation has its nuances, the frenetic churn reflects some fundamental shifts in the retail business over the last few years that have made CFOs’ jobs significantly more challenging. The pandemic and labour shortage put pressure on companies’ budgets, while high inflation, slowing growth, rising interest rates and the Silicon Valley Bank crisis have added to retailers’ unease. Then there’s the steady drumbeat of consolidation and the rise of e-commerce, which have over the last decade changed conventional wisdom around everything from investment strategies to real estate values.

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The result is that the CFO role — the executive at the heart of a company’s financial planning and investment strategy — has become “both in demand and demanding,” said Lisa Yae, managing partner of the Retail & Luxury Goods Practice at Hanold Associates.

“My guess is that we’re just seeing the beginning of it,” she said. “Companies, investors and shareholders are going to be looking at boards and executive teams to make sure they have the right CFOs in place … to be mitigating risks and planning for what the next year looks like.”

The New CFO Toolkit

In the past, chief financial officers were often viewed as number crunchers, tracking cash flow, balancing budgets and controlling expenditures. These days, CFOs play a much bigger role in companies’ decision making and are expected to have softer skills, such as effective communication, agility and a knack for team-building.

What’s more, their influence on the chief executive officer has grown beyond providing counsel around the company’s financials “to being a thought leader across all sides of the business,” said Kyle Rudy, senior partner at Kirk Palmer Associates.

One sign of the shift, said Perkins, is that more and more CFOs are coming from a Master of Business Administration (or MBA) background — where training cuts across finance and accounting but also marketing, management and business ethics — as opposed to the certified public accounting (or CPA) background, where the focus is squarely financial. (An individual can hold both an MBA degree and CPA certification.)

“It used to be that bean counter — somebody who came up through the accounting ranks and was corporate controller or chief accounting officer before assuming the CFO role,” Perkins said. “Now what we see is individuals who have been embedded in the operations side.”

Generally, leaders whose career paths include an emphasis on financial planning and analysis rather than predominantly accounting roles have become more desirable, she said.

Burberry’s new CFO Kate Ferry, for instance, is joining the luxury brand from McLaren Group, where she was also finance chief, but her resumé includes a two-year stint as retail analyst at Dresdner Kleinwort Benson in London in 1998 and a nine-year stretch as a director of the equity research team covering pan European general retail for Merrill Lynch, beginning in 2000. Before becoming CFO of Nike’s Jordan Brand in 2021, Skims’ new CFO Andy Muir (she landed the role last May) earned her chops as a financial analyst for Bank of America and PepsiCo.

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Fashion companies in particular have contended with drastic real estate downsizing over the last decade as they closed stores as well as an ebb and flow of M&A activity across certain sectors, which has challenged finance chiefs to have “much more intuitive-thinking on long term-financial investing than has been required in the past,” Craig Rowley, a senior client partner at Korn Ferry said.

An online shopping boom — which got its second wind during the pandemic — has only fuelled the complexity of financial planning, with many fashion firms struggling to drive up e-commerce margins as consumers demand free and faster shipping, he said.

“It’s harder to make money when you’re 30 percent e-commerce,” Rowley said. “You can’t make money shipping a bottle of shampoo to someone’s house.”

At the same time, the DTC bust last year saw many previously high-flying industry disruptors shed share value and revenues at a rapid clip. That crisis is likely a key driver behind the CFO churn at Allbirds, Asos and Stitch Fix — all three of which are wading through turnaround plans, experts say.

This month, apparel subscription box retailer Stitch Fix replaced its outgoing CFO with finance veteran David Aufderhaar, who had been the company’s senior vice president of finance for almost four years. Aufderhaar was previously Twitter’s VP of finance and financial planning and analysis (or FP&A) — and spent nearly a decade at Visa, with multiple executive titles, mainly in the FP&A function.

The Experience Factor

As the economic outlook gets more grim, more companies will start to look to experienced finance chiefs who have “weathered economic downturns in the past,” to get them through, Yae said. Of 113 new CFO hires across sectors in the past year, 64 percent were experienced finance chiefs who had led the function before (compared with 36 percent who were taking on the role for the first time), Kirk Palmer Associates’ research found.

But fashion companies will need to balance their need for CFOs to be highly experienced with the expectation that these leaders are nimble enough to adapt to a new consumer landscape — where e-commerce remains a crucial channel and issues like sustainability and diversity are top of mind for consumers and employees alike.

“CFOs need to help companies navigate this incredibly volatile, uncertain macro environment while also making strategic investments in data, technology, e-commerce, stores and supply chain logistics,” Rudy said. “They’re being asked to deliver quick wins as well as long term strategies.”

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These complex expectations, he added, require a broader, more strategic leadership acumen beyond the traditional financial silos.

To ensure their finance leaders have the right mix of skills, companies are increasingly employing personality tests and psychological evaluations aimed at gauging emotional intelligence, Perkins said.

“[Companies] are so focused on getting that interpersonal element correct,” she said. “Everyone talks about [the importance of] culture and being able to lead through times of change and that absolutely takes some huge interpersonal skills.”

Further Reading

A Guide to Fashion’s New C-Suite

The executive ranks at big brands increasingly include once-unknown job titles, reflecting an industry-wide shift in focus to improve its record on areas such as diversity, sustainability and logistics.

The CEO Fashion Needs Right Now

Several major fashion firms, including VF Corp., The Gap and The RealReal, are without a permanent chief and experts say the turmoil at the top is a prime opportunity to reshape the industry’s leadership profile. MyTheresa and J.Crew CEOs discuss leadership.

About the author
Sheena Butler-Young
Sheena Butler-Young

Sheena Butler-Young is Senior Correspondent at The Business of Fashion. She is based in New York and covers workplace, talent and issues surrounding diversity and inclusion.

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