A fresh perspective with an underlying understanding of Herman Miller's culture. Experience with digital transformation. Marrying brand building through design and innovation. Creating products responsive to the market and customer-centric. Those are a few of the reasons Herman Miller picked the leadership of Andi Owen, who last week was named president and chief executive officer to replace Brian Walker.
Her resume during a 25-year career at Gap Inc., where she most recently served as global president of Banana Republic, leading 11,000 employees in more than 600 stores across 27 countries, helped Owen land one of the most important jobs in the office furniture industry — guiding an iconic brand and helping it navigate a period of incredible change.
Owen begins work today as leader of the second largest office furniture maker in the world. She will also take over a seat on the company's board of directors. And like any CEO new to the job in a dynamic and changing industry, she has her work cut out for her. Changes in the real estate market, the way people work and the global market for office furniture will challenge her, but the board believes it made the right selection for a variety of reasons.
“Under Andi's leadership, the business will seize opportunities that will lead to growth in new markets for both contract and consumer customers,” said Michael Volkema, board chairman and former CEO. “Andi has the right gifts, talents and expertise to accomplish this mission. She understands how to realize the potential of a brand amidst changing customer preferences and habits. We are thrilled to welcome her onboard.”
Volkema said Owen's strengths are highly complementary to Herman Miller's leadership team's contract furniture expertise and growing retail capability. Over her tenure at Gap Inc., her career spanned many verticals and brands within the business. She has developed a diversified skill set that aligns with the strategic direction of Herman Miller and ranges from digital and omni-channel transformation to design, product development and supply chain management.
“Andi brings fresh perspective to Herman Miller,” said company spokesman Marc Singer. “She understands our culture, lives the values that are important to our company and has the right expertise to continue to accelerate the growth of our business and expand our addressable market. She understands how to adapt to the evolving customer in a rapidly changing and increasingly digital world. Her accomplishments include developing new 'digital first' growth strategies, introducing innovative marketing and new customer acquisition strategies and driving global expansion in key markets.
The board utilized the services of Korn Ferry, an executive search firm, and interviewed what it called “an impressive slate of diverse candidates from all over the world.” The board was looking for a candidate that aligned with Herman Miller's values and culture, could accelerate its current strategy and help the company pursue adjacent opportunities. The board said Owen's global and customer-centric perspective complements its expertise in both the contract and consumer furniture industries.
Presidents and CEOs from outside the industry have had a mixed amount of success coming into office furniture, but the Herman Miller board feels Owen has “thrived in spaces where business and creativity come together” to build leading brands through design and innovation. “She ... has extensive experience managing points of distribution on a global scale,” Singer said.
Industry watchers are taking a “wait-and-see” attitude. “The downside is Ms. Owen is an 'outsider,' ” said Michael Dunlap, a longtime industry wonk and owner of an office furniture consulting firm. “The retail world with its East and West Coast cultures is far different than West Michigan. The Herman Miller culture is unique. Will she change the HMI culture or will it change her?”
It is unclear how Owen's skills will translate to the office furniture industry, but assuming Herman Miller continues it efforts to become a lifestyle brand that operates beyond the office, it could be a good move. Owen's retail experience will definitely benefit Design Within Reach. “With Herman Miller's enhanced focus and growth in the consumer and specialties market segments (both up 11.9 percent from the previous year), it makes sense to pick an experienced executive from the consumer/retail business,” Dunlap said. “The contract furniture industry has often been referred to as a 'fashion business,' so I think it could be enriched by leadership with her different perspective and experience.”
Still, her past — even in retail — is a mixed bag.
Owen had a mostly strong career with Gap and Banana Republic brands. She was well-regarded, according to many in the retail industry, but left Banana Republic after unsuccessfully trying to resuscitate the brand.
Owen spent two years as president trying to nurse the clothing brand back to life. She had one quarter of positive sales — her first — followed by seven quarters of declines that ranged from a 4 percent drop in the second quarter of 2015 to a 14 percent dip in the fourth quarter of the same year. Most on Wall Street never expected her to succeed, with some believing the brand should have been eliminated from the Gap's portfolio altogether.
On Owen's 24-month watch, comparable sales fell 21 times, according to a story in Fortune magazine that said she was “ousted.”
“(Owen) was simply unable to find a new niche for the brand at a time office apparel is more casual and women are buying trendier apparel at fast fashion chains like Zara,” the article stated. “There were plenty of fashion misfires even before her arrival, such as too big a bet on crop tops a couple of years ago ... too much focus on black and white, and silhouettes Owen once conceded were 'oversized and boxy.' In late 2015, a year into her stint, the company was still complaining of 'product acceptance challenges.' ”
The board looked at Owen's track record and found her “long and successful career at Gap where she handled growing businesses, international expansions and turnarounds” outweighed a few troubled quarters at the retailer.
“She set and aligned the team on a strategy of omni-channel reorganization and elevated product quality,” Singer said. “This included growing e-commerce, creating a new supply chain and identifying operational efficiencies. All of these experiences make Andi uniquely qualified to guide Herman Miller into its next phase of growth, expansion and evolution. After spending over 25 years at Gap Inc., Andi chose to leave on her own volition and on excellent terms, as it was determined that future investment would continue to be focused on other divisions of the company. In fact, Art Peck, CEO of Gap, still has a great relationship with Andi today and is excited to see her take the helm at Herman Miller.”
A press release announcing the appointment included the following comment from Peck: “I am confident in Andi and her abilities. She had a long and successful track record across Gap's portfolio of brands, and I am excited to see where her vision and leadership will take the iconic Herman Miller brand in the future.”
Owen will make a $1 million base salary to start at Herman Miller. According to her agreement with the board, she will also be eligible to participate in the annual executive cash incentive bonus, with a target annual bonus opportunity equal to 100 percent of her base salary and a maximum bonus payout of up to 200 percent of her base salary. She will receive an initial equity grant in the form of restricted stock units and stock options, which will have a collective target value of 250 percent of her base salary. Also, she will be able to participate in all benefit and retirement programs and will receive a $50,000 payment to cover any relocation expenses not covered by the company's standard relocation policy. Owen and her husband, who owns his own architecture firm, plan to relocate from New York to West Michigan.
Owen replaces Walker, who had a long career with Herman Miller. He plans to stay in West Michigan, reportedly to spend time investing, including an interest in a Holland restaurant.
Volkema said the company is “deeply grateful to Brian for his leadership and many achievements during his long career with Herman Miller. The company remains focused on the strategy Brian put in place, which has collectively grown the business, expanded our multi-channel capabilities, and accelerated the company's positive momentum.”
Herman Miller is only just beginning to scratch the surface of its addressable market opportunity, Walker said. “Andi's experience driving results as a seasoned leader, coupled with our outstanding leadership team, will take our family of brands to the next level,” he said. “This is an exciting time for the company, and I look forward to working with Andi on a seamless transition.”
From 2014 until 2017, Owen served as global president of Banana Republic, a $2.8 billion brand. She led all facets of the global omni-channel division, which sits under Gap Inc. Over the course of her career at Gap, Owen:
- Led Banana Republic brand with 600-plus wholly owned and franchise specialty and outlet stores in more than 27 countries, websites in four countries and more than 11,000 employees
- Led Global Outlet Division for Gap brand
- Developed a brand platform and vision based on customer and employee input
- Re-engineered product pipeline to return product quality standards and to increase customer input, supply chain flexibility and speed
- Introduced innovative marketing and customer acquisition strategies with an emphasis on digital/social investment, influencer partnerships and data mining
- Led complete omni-channel organizational transformation, creating a "digital first" structure, processes and growth strategies, resulting in web sales and profits exceeding plans and surpassing leading industry standards
- Launched Gap Factory Store Division in China and Europe, delivering profits in the first year of operation
- Launched Gap Factory Online Division, doubling sales in first six months
- Assembled a high-functioning leadership team with a greater balance of external and omni/digital experiences to change company culture and increase innovation
- Owen serves on the boards of Taylor Morrison Home Corporation (NYSE: TMHC), Goal Five and First Place for Youth, a nonprofit supporting foster children. She holds a bachelor's degree from the College of William and Mary and has completed the Advanced Management Program at Harvard Business School.
“Herman Miller has a reputation for being the best in the business,” Owen said. “It is a privilege to lead the company and continue the evolution of its world class portfolio of brands. I'm excited to work with the management team and the broader organization to build upon the legacy of innovation and design excellence that is at the heart of Herman Miller.”