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Mexx lost its way after founder resigns
American investment fund Gores has been the majority share holder since 2011, after paying 60 million euro (85 million dollars) to acquire 81.25% of the clothing brand. Gores recently acquired the remaining 18.75 %, granting them full control of Mexx.
At the time of Gores’ first involvement, Mexx was already on a downward sales spiral and taking increasing losses. Liz Claiborne, who had purchased Mexx from founder Rattan Chadha in 2001, could not steady the ship after the founder resigned in 2006.
Business plan changes focus
Gores helped create a new business plan, focusing on the closure of non-performing stores, a renovation of other stores and the opening of ten to fifteen new stores per year. Those stores would need to refocus on wholesale and the middle part of the market.
Thomas Grote, former Esprit executive, took charge of Mexx in October 2009 and had to steer the company through these changes. He left in May 2012, leaving the company in the hands of Douglas Diemoz, a former employee of Gap and Old Navy. With Mexx, he started out as financial director, then took responsibility for the transformation process, before ending up as CEO.
Results have been underwhelming though, considering the heavy competition from H&M and Zara, among others. Gores is now taking matters into its own hands, placing someone from within to head Mexx.
