But execs did not expect significant changes at the company when she takes over the role in May. Ron Fromm, the company’s current chairman and CEO, will remain on board as chairman, and the pair will continue to work closely together.
“It’s not a surprise,” said Christopher Svezia, an analyst at Susquehanna Financial Group. “It’s a matter of passing the torch, and Diane is close to Ron, so I’m sure it will be a seamless transition.”
Retailers observed that Sullivan has played a key role in Brown’s success.
“She is a sharp merchant who does a great job of listening and staying very connected to both her retail customers and the end customer we serve,” said Scott Meden, Nordstrom EVP and GMM of shoes.
“Diane is a strong, strategic and collaborative leader. She has always been an invaluable partner,” added Debbie Ferrée, vice chairman and chief merchandising officer at DSW. The exec also applauded Sullivan’s “philanthropic point of view,” particularly her leadership of Two Ten Footwear Foundation’s new Women in Footwear Initiative.
Fromm called Sullivan “a clear and obvious choice” to succeed him, adding that the move was the result of an 18-month succession plan instituted by Brown’s board of directors.
“The board and I have been working on succession planning for a while,” Fromm said in an interview last week. “We obviously brought her on board as president and then made her COO for a reason.”
Sullivan joined Brown Shoe in 2004 as president and added the COO title in 2006. She was elected to the board of directors in 2007, and has spearheaded much of the company’s growth over the past several years.
For her part, Sullivan said she was excited to begin a new chapter at Brown. “It’s a great thing on all fronts,” she said. “I have the opportunity to continue to work with Ron as he sets the agenda with the board … and at the same time, I have the opportunity to implement a lot of strategic plans.”
Sullivan said she plans to forge ahead with the expansion agenda at Brown, which has emerged from the recession as one of the industry’s stronger players.
Shares of Brown Shoe were trading as much as 13 percent higher last Wednesday afternoon, hitting a year-to-date high of $14.87 and closing at $13.96 on Thursday.
The firm blew past analysts’ earnings estimates for the last three consecutive quarters, and said in a statement Wednesday that it remained confident it would generate low- to mid-single-digit sales growth in 2011 and achieve earnings per share of $1.31 to $1.43.