The Power of the CEO

 | Oct 28, 2011 | 11:37 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:








People underrate execution constantly in this business. They hardly ever want to say, "You know what, that CEO is so good, I am going to bet with them."

I understand. Lots of CEOs have let us down. The ones who stand out tend to be quiet people just doing their jobs, like Sandy Cutler at Eaton (ETN), Dave Cote at Honeywell (HON) and Ellen Kullman at DuPont (DD) -- all solid people toiling in old-line companies, reinventing them brick by brick and turning them into powerhouses.

But where the power of the CEO is chronically underestimated is in retail. Here the be-all and end-all is the eye of the CEO, the ability of the CEO to exploit, to spend, to try something different, to stretch the creativity of the mind.

That's what Mickey Drexler did at Gap (GPS) and then at J. Crew, which, by the way, is by far the most respected retailer that I know. There's J. Crew and there is everyone else, and when you talk to retail executives, they speak in awe of the man. They should. He has the perfect combination of a merchant's genius, fiscal discipline and concept creation.

But the other man people should be speaking about is Angel Martinez, the miracle man behind Deckers Outdoor (DECK) and someone who simply knows more about shoes than anyone else on the planet.

Here's someone who has taken an allegedly faddish show, Uggs, and has extended it to the ultimate worldwide luxury comfort item. Last quarter, he made a bold move to switch distribution systems in Europe to a more lucrative model. Wall Street was disappointed, wrongly, I might add, because when we saw last night's numbers it became clear that international growth is the key to the next leg of the story, and the distribution change allows the numbers to flow to the bottom line. That plus the bold move to go into men's Uggs, spearheaded by NFL star Tom Brady, is already paying dividends. Also look out for surfer flip-flop Sanuk, a recent purchase that hopes to smooth out seasonality of a company that was originally Teva, the sandal business.

Martinez is someone we have been praising for years. I've been behind him ever since he turned Rockport into the juggernaut cross show (work and play) and I am wearing them today, as I have since 1997 when I first saw them and endorsed them as THE answer to the conundrum of expensive men's shoes that tire your feet.

I thought Deckers would sell off when it reported because it had run so much. But the quarter was so strong, it didn't. Keep Deckers in mind for any selloff because you aren't just getting Uggs, you are getting Martinez, and that means you are getting the best brand in the footwear business.

Columnist Conversations

Foot Locker's (FL) less than expected quarterly earnings set off a round of selling the entire athletic appare...
View Chart »  View in New Window » Gold has met the first upside target off the last setup zon...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.