Financially troubled Merry-Go-Round Enterprises Inc. yesterday named R. H. Macy & Co. executive Richard P. Crystal as its chief executive officer effective Aug. 1, making him the fourth CEO in the past two years for the Joppa-based fashion retailer.
Mr. Crystal would succeed Thomas C. Shull, a corporate turnaround specialist who has been running the company since mid-January.
Mr. Crystal, whose appointment is pending bankruptcy court approval expected at a July 7 hearing, will be charged with reinvigorating a company that has lost tens of millions of dollars over the past two years as sales have plummeted.
But the 50-year-old retail veteran said yesterday he welcomed the challenge of running the company, which has been in Chapter 11 bankruptcy proceedings for 18 months: "It's very exciting and intriguing for me," he said from New York in a telephone interview.
His appointment, expected since The Sun identified him as the top candidate two weeks ago, was applauded by industry observers of the 1,000-store apparel chain, which comprises Merry-Go-Round, Chess King, Dejaiz/Attivo and Cignal
"We're delighted that he's accepted the offer," said Stephen Selbst, attorney for Merry-Go-Round's equity committee, representing company shareholders. "He's clearly a merchant, and we believe the company needed a merchant all along.
"Numbers people don't sell clothes to young people. You need somebody who understands the market. . . . It's hard to imagine writing a resume more perfect" for the job.
Mr. Crystal recently resigned as chairman of Macy's product development division, where he was responsible for all private-label product development worldwide. He also served as chairman and CEO of Macy's specialty stores division, which included the Aeropostale and Charter Club specialty stores.
Aeropostale, likened to the Gap, sells men's and women's sports and casual wear in more than 60 stores with an aviation theme. The Charter Club sells women's career wear in about 30 stores.
Terms of the agreement with Merry-Go-Round were not released, but a source said Mr. Crystal signed a three-year contract with a base salary of $650,000 in the first year and $700,000 in the third. The contract includes a guaranteed bonus of $250,000 in the first year; afterward, bonuses will be based on performance, the source said.
Mr. Crystal is the second consecutive former Macy executive to take the helm at Merry-Go-Round. Mr. Shull was Macy's executive vice president and No. 2 manager until last summer.
Mr. Crystal, born and raised in New York City, has been with Macy's since 1974, except for a stint from 1979 to 1982 when he served as a senior executive for New Jersey specialty retailer Petrie Stores Inc. He holds a bachelor of arts degree in history from New York University.
With his background, Mr. Crystal said of the job, "It was sort of an easy decision. It offers me a good fit for my skills. . . . I have an extensive merchandising background, and I've also been through bankruptcy [with Macy]. It gives me insight into how people think and how to alleviate some of their fears."
Mr. Crystal said it would be premature to talk about strategy to turn the company around. "I really want to get in there and understand the business and talk to the organization and try to understand what customers want. . . . I haven't really made a thorough assessment."
Still, he has some broad plans: "I plan to be there a while, a long time," he said. "Hopefully, I'll be able to set a vision for the organization that will be easily understood."
Mr. Shull, whose contract with Merry-Go-Round expires June 30, was gracious about his successor: "Having worked with him extensively during the Macy's reorganization, I think he offers continuity of direction," he said in a written statement.
Since November, Mr. Shull and his partner, Jim Kenney, have led the company under the interim management of their crisis consulting firm, Meridian Ventures, sharply cutting costs and closing hundreds of poorly performing stores.
Merry-Go-Round absorbed a net loss of $186.3 million for the year ended Jan. 28. And some believe a change was needed.
"If they were doing a great job, they'd still be there," said Michael Castle, a clothing vendor in New York whose company, In Private, sells garments to Merry-Go-Round.
"I think they're on the right track now, because they've finally realized what they need to do is to get their customers back. They need somebody who really understands who their customer is, and hopefully, Mr. Crystal is that person."
The announcement was made after the stock market closed yesterday. Merry-Go-Round's shares ended at 87.5 cents, down 6.25 cents, on the New York Stock Exchange.