Transcript
Speaker: Music
Speaker: Hey, everyone. It's Mike Potenza from Becker Accounting Podcast, and we are back for another episode. And this week, my guest is John Skopanski. Now, John is a very busy guy. he is the CFO of The Children's Place, a publicly traded company, and time is precious. So, John, thank you so much for being here. I really appreciate you carving a little time into your busy schedule to come in for this podcast.
Speaker: Thanks, Mike. Thanks for having me. I'm happy to do it. Thanks so much. I really do appreciate it. So being the CFO of a publicly traded company is something that a lot of people aspire to one day, whether you're working in accounting, you're working in finance, it's pretty much you know the top of the mountain and you got there and I would love to hear your story and your background. So maybe we could just kind of start at the beginning. Tell me, you know where are you from? Where'd you grow up? Where'd you go to school? Give me a little bit about the early years of John Skopansky.
Speaker: Sure. um Yeah. So I was born and raised in in Yonkers, New York. I actually still live in Yonkers. um You know, I've worked most of my career in in Midtown Manhattan. And where I live is a nice train ride into the city. So hadn't ah you know I live in a great place and hadn't had the yeah ah the the needs, the wants, the the desires to move. So it's great.
Speaker: um Yonkers, they say, is one of the safest cities in in the United States and happy to be a Yonkers resident, lifelong Yonkers resident. um I went to school at Fordham University undergrad ah with graduated in 1992 with a ah Bachelor of Science in accounting.
Speaker: um And then I also have a graduate degree, Masters of Science and Finance from Boston College. Awesome. Awesome. What do they call Yonkers? They call it the big Y.O. or something like that?
Speaker: That's right. That's right. The Y.O. All right. I love it. I love it. So you go to Fordham University. yeah I used to teach at Fordham University. So a little small coincidence right there, but I don't think we overlapped. Go Rams, go Rams. That's right.
Speaker: And you graduated in 1992. Now, I graduated undergrad in 1991. So right around the same time. And you know if my memory serves me correctly, and I believe that it does, that was not a good time to graduate. We were in the midst of a recession that you know a lot of these ah you know people graduating today have never lived through. So when you graduated, what is it easy for you to find a job in accounting?
Speaker: it it was It was a challenge, Mike. guy Thinking back, um you know it took me ah a good while from graduation in May. i didn't start my first job in accounting until the following January. So it was it was quite a long while.
Speaker: um you know it it it was i had i had met a girl close to that point of graduating, and I so i was spending a lot of time with with her. She ultimately turned out to be my wife, so it was all good. It turned out great.
Speaker: um But during the course of that time, I had a I had a good friend of mine, um my best friend from from high school come. ah He actually came uninvited to my home and said, we're going to get you a job.
Speaker: And I was like, OK, let's let's go for it. So we did this this massive 200 job mege mail merge. um And it was we spent all day doing it, sent out 200 resumes, 200 applications, and I had one reply. And i the one reply, ah the one job offer there I took. So that was that was the that that was the environment there. um it was the At the time, it was the big six. The big six was tough to break into.
Speaker: um There weren't many other jobs out there. And it was it was a struggle. But you know the The one out of 200 opportunity was the one i landed in.
Speaker: Wow, that is pretty amazing. So ah thank goodness for friends like that, right? Otherwise, where would you be now? Well, I could probably use this guy to talk to my kids because I want to make sure they get jobs. So ah you might have to give me his name and number.
Speaker: So now you get this first job. You're working in accounting. Are you working for a public firm? What kind of job is it and what type of work are you doing? Yeah, um it was ah it was a smaller ah smaller regional accounting firm on Long Island. um The principals were ex-Big Six at the time, um and they went out on their own and started their own firm.
Speaker: um They focused on ah smaller regional ah ah retail apparel companies in um in the tri-state area. So you know I started doing various ah elements of audits for for those those clients. um And I did that for a good a good year.
Speaker: So you did mention though that you got a master's. So did you do that while you were working and go at night or did you just say, you know what, I've had enough work. I want to go back full time. Walk me through that process.
Speaker: Yeah, you know, as as i was I was doing all of that audit work and at some point i I was reflecting on, you know, is this after about a year, is this is this the the thing for me or, you know, is there is there something else that I should be focused on from a career a standpoint?
Speaker: um And at that time, i had i had decided that, you know, upon reflection, know, When I was in school the and so and you know studying for the the accounting bachelorette, the classes that really resonated for me were all the finance classes, corporate finance and the like.
Speaker: And I said, you know what? I really want to try this. i i really think that this would be an exciting um you know long-term path for me. So I went and applied to a few graduate programs at the time. And um I ultimately attended Boston College um in their master's of science program.
Speaker: And when I was making these decisions, i was thinking thinking through MBA programs or or MS in finance programs. And I learned more, I realized the MBA programs were more tailored to subjects that I had already taken.
Speaker: um And since I was really interested in finance and the different the dis different disciplines ah under under finance, corporate finance, international ah modeling, econometrics, statistics,
Speaker: um Those kind of hardcore elements of finance, um I decided to land in ah in that master's program at at Boston College. And ultimately, ah graduated with an MS in finance in 1995.
Speaker: Okay, so you decided at that point, you know finance is a path forward for me. I'm not going to go public. I'm not going to do the CPA because it just kind of spoke to you more, which I'm not going to hold that against you as a CPA to each his own, but you know it's great to hear. And that's that's really, you know we joke about it, but- you know As long as you're doing something that you enjoy, what do we say? You never work a day in your life, right? So it's good to hear that you found out what you liked and you pursued it. So you get this master's in the finance and now you're looking for a job again. Was the economy better at this time? Was it easy to find a job and where did you land?
Speaker: Yeah, you know after after three years post-graduation, it it actually wasn't much better at the time in you know the mid-90s. um you know It subsequently got better in in the later 90s, but it was it was a bit challenging, especially in the Boston area.
Speaker: um So again, i had I was at a crossroads, had to make some decisions about, do I want to stay in Boston? Do I want to focus on on ah analyst jobs at a bank, an investment bank?
Speaker: Or do I want to look at jobs in corporate? um I ultimately decided to go back home ah and look for jobs in corporate because I thought that track fit my my skill set and what I was interested in a little bit better than yeah yeah the equities markets or trading or things of that nature. So um I ultimately landed a role, my first job out of grad school with a company called American Brands.
Speaker: ah They actually, while I was there, they changed their name to Fortune Brands. But what it was, was one of the um um know change ah holdovers from the the tobacco industry as they were transforming into more conglomerates.
Speaker: um And as they were de-risking their their portfolio from kind of the backlash around tobacco. um So it was an ex tobacco company from a from a US perspective, they had sold off their their US tobacco business, they still had international tobacco businesses.
Speaker: But what they did was they invested um the money from the divestiture of tobacco into other industries. um So the company had a golf business, they had a liquor business, they had a a home business, um a home products and an office products business. um What's really interesting about that is, as ah you know i I subsequently learned is, you know doing that kind of normalized their business and took so a lot of seasonality out of it, which you know Going forward and you know in the during the rest of my career, it was something I really appreciate.
Speaker: um Now being in in apparel, um it's a very cyclical business. So um finding ways for companies to mitigate those seasonal risks from a cash flow perspective, from a revenue perspective, it was a pretty pretty smart move by by the company's board and and by the company's management.
Speaker: Interesting. So were you dealing most of the time in the cash management for American brands or in other areas? Yeah. So i started I started out in the treasury department in the cash management group. And with a company like this, with multiple ah lines of business, multiple different forms of cash coming in and going out, a major portion of the company's cash flow was coming from overseas.
Speaker: ah the Really, ah the cash management function was one of the more ah looked at areas within the company. So it was a really good start in terms of understanding you know how the treasury function worked.
Speaker: um So when you think about corporate finance, it's not one thing, it's multiple things. you know You've got treasury, you've got tax, you've got corporate FP&A. ah Some businesses have strategy and business development as as part of that. So it's really getting what i what I was able to do was start that career in in that one aspect of treasury, um spent a good time in cash management, and also pivoted over to foreign exchange.
Speaker: um you know Given the company's exposure to offshore ah cash flow. So really learned about international markets, really learned about understanding ah the fluctuations and the whys of the fluctuations and in the foreign exchange markets.
Speaker: um And how to hedge, it was really ah you know really managing cash flow to hedge the the real extreme movements in in currency over time.
Speaker: um you know And that's part of risk management. That's a really important part of what ultimately a corporate finance function ah is responsible for is managing risk for for a company.
Speaker: Well, it sounds like great experience, especially for someone still very young in their career. So how long did you stay at American Brands and what was the next move after that? Yeah. So I was at American Brands for about two years, um at which point I was approached for a role at a company called West Vaco.
Speaker: um The company no longer exists and it's in a different form today ah after multiple mergers and and different incarnations. But at the time, it was a paper company that um And a paper company that also supplied um what they called folding cartons to the beverage and the and the tobacco industry and the consumer products industry.
Speaker: So when I joined the, and they were the prime, they were like the primary manufacturer of that product. um I joined the company in the Treasury Department. The treasurer also was responsible for the FP&A function. And when I was recruited, I was asked to essentially um manage the corporate financial model, which at the time was ah an old Lotus 1-2-3 spreadsheet that um needed some serious revamping and and upgrading. So, um you know, with with my recent history at at American Brands and coming out of grad school,
Speaker: heavy work on the the Excel side. I was able to revamp this corporate model to a place that was ah really looking at able to look at different scenarios quickly um and and really provided a little bit more value than than the old model ah old model had.
Speaker: And then coincidentally at the time, the company was beginning an acquisition effort um and mostly focused on consumer packaging. So um at the time, that we created a strategy and business development group.
Speaker: that I work closely with managing the corporate model um in understanding um different acquisition targets, understanding the valuation of different targets, understanding how to model those targets into the portfolio, the accretion and dilution of of acquiring a business um was all part of that ah that activity. So having that exposure from M&A and business development side was was kind of another you know quiver, so to speak, ah in in in the ah in the tool in the tools tool set.
Speaker: Well, you're going into this role and they're asking you to do things that you hadn't done before, like the valuation and dealing with the mergers and acquisitions. How do you know what you don't know and how do you you know learn this skill set, especially at such a young age?
Speaker: Yeah, it's a great question. Some of it's trial and error, but you know at the time, um you know i was fortunate enough to have really good ah managers, really good mentors at the company.
Speaker: um I spent time you know battling and trying to figure things out on my own. But at some point, um you also have to realize that time is literally money. And you have to be efficient with your work. And you can't always just try to muscle through things yourself. You have to ask for help.
Speaker: So, you know, I quickly realized that, you know, you have to raise your hand and you have to ask for help sometime. And I was fortunate enough within the company to have good counterparts, as well as good managers and mentors to to help navigate through that those those questions.
Speaker: So I'm assuming now you're a a number of years into your career and you're working in finance, you're getting all these new quivers, right? And you have these new skillsets you're developing.
Speaker: But let me ask you, did you often have to rely on the accounting foundation and the bachelors that you had in accounting? Would that come into play as you're working in finance as well?
Speaker: Absolutely. So um probably less so in the early days on my treasury and and foreign exchange side, but certainly at the ah in the West Vaco, my with experience at West Vaco, I was very ah attuned and worked very closely with the corporate finance team.
Speaker: you know You can't build a financial model without understanding the nuts and bolts of the accounting it behind the financials. um You know, furthermore, you know, in ah in an FP&A role, you know, I really look at FP&A and accounting really as ah kind of a hand in glove relationship. You know, the the accounting side is working on the actuals and the clothes and ensuring that the the books and records are represented ah properly.
Speaker: The FP&A side is taking that as a jumping off point and leveraging that for the future plans of the company and translating the future plans into a financial plan.
Speaker: you can't You can't do that without having an underpinning in accounting. so So definitely my my my education, my time and in in public accounting, although brief, definitely helped with that those foundational elements and really helped me communicate with the accounting team um on a day-to-day basis, and you know during close, during during different close cycles.
Speaker: different clothes cycles Excellent. Okay. So let me ask you now, how many years do you stay at West Vaco and why'd you decide to leave and what was the next step after that?
Speaker: Yeah. um I was at West Vaco. Ultimately, the company, um during my my early days, during that acquisition cycle, company ultimately created a consumer packaging group.
Speaker: from all of these acquisitions that it had done. um And it also merged with a big um ah a big a paper company called Mead. Back in the day, Mead had the Trapper Keeper and all of that for for school products.
Speaker: um So the company merged and and was called Mead West Vaco. And after that merger with this consumer packaging group, I moved from my corporate FP&A role to a divisional FP&A role, which was really interesting and ah and a big pivot because you know at the enterprise level, you know managing FP&A is very different than at a divisional level.
Speaker: And what was really exciting for me is is working with the sales team, working with the manufacturing teams on cost, and building really the the the the essentials and the the building blocks of ah of that division's financials.
Speaker: um And again, still working ah monthly on the closed process with the accounting teams, but really working more ah in a roll up the sleeves way on on building those financial assumptions around the division that ultimately builds into the the corporate enterprise.
Speaker: So that was a great learning for me, ah learning how cost accounting works, learning how ah product costing works, learning how um ah the revenue model for different businesses ah evolves and and gets established.
Speaker: um and And after a few years doing that, I ultimately got tapped on the shoulder around an opportunity ah with Ralph Lauren, the the fashion company.
Speaker: And um the role was really supporting ah the sourcing operation. Company had hired a new head of sourcing um and that head sourcing wanted someone outside the industry, someone who understood costing and could really help guide his team as they're working on the procurement of of, you know, the apparel products that they were responsible for each season, each each monthly delivery.
Speaker: um to ensure that the company got the best price. So um it was really an interesting role for me and ultimately, obviously, took the role. um And it was a great entree into such a large organization. At the time, Ralph Lauren was about a $4 to $5 billion dollar company. It's now an $8 billion dollar company. It's almost double the size.
Speaker: um And it it was a great way for me to a learn something completely different, different industry, um but apply some ah a lot of the skills that I had developed over over the time at ah American Brands and then again at West Vaco into a completely different, ah completely different job.
Speaker: Well, I mean, you talk about differences, right? Tobacco to paper to your luxury clothing. That definitely sounds like a great diversity in products for sure.
Speaker: But it's always good to know that the skills that you acquire through all these different phases of your career all just lead you to the next big thing that you're going to do. So you're at Ralph and you're you know working in, I assume, different areas. you stay in the sourcing and or do you just kind of move from division department all around Ralph? Tell me about your experience there.
Speaker: Yeah, I was fortunate enough for Ralph Lauren to have an 18-year career. And you know during that time, um i like to say i had I had a new role every two years. I had this informal rotation, about 10 different roles during my time there, different responsibilities, expanded responsibilities, varied responsibilities over that time, leveraging and as the the jumping off point within that sourcing FP&A function.
Speaker: um After that, I was fortunate enough to be put on a project for a new um yeah ERP system and SAP. The company um had bought SAP as a platform.
Speaker: um I was a key project manager on that um on that implementation um and got a lot of exposure in terms of ah the company's order-to-cash processes, the revenue processes, the procure-to-pay process, and and really revamping how the company managed that from an accounting and finance perspective, um and the record-to-report function that underpins that. So um really learned a lot about SAP, but also learned a lot about company transformation in the fact that we were putting out in this new system
Speaker: which required new ways of working um for business people, required new ways of working for our accounting folks and for our our corporate finance folks. So it was really a transformational effort um that that moved the company in a different direction, create a lot of automation, ah reduce the amount of redundant processes,
Speaker: um and increased overall productivity for the company. um I was also able after that to leverage that experience and move into an operating role in our wholesale ah division.
Speaker: um I ultimately became a divisional CFO for wholesale. um And then over the course of of the remaining years, ah built a portfolio, a CFO portfolio ah within the company. My last stop, I was CFO for brands and and the brand organization was focused on, um call it the front end of the business, the design, the merchandising, that the creative side of the business.
Speaker: ah The supply chain, which is more the back end of the business, the the procuring of the product, the delivery of the product into distribution centers and into stores and ah to the consumer if you're e-com.
Speaker: um And I also was responsible for a division of the company called the Lifestyle Division. And the Lifestyle Division was our home division.
Speaker: and our hospitality group. And if you know about Ralph Lauren, they have a great ah suite of restaurants as well as coffee shops. Ralph's Coffee is a big, really good coffee. um So I was responsible for that.
Speaker: And then, you know, over time, ah towards the end of my career, um you know, leadership really looked at what I was responsible for and said, you know, there's there's not a lot of natural ah successors um with this kind of ah ah amalgamation of different sides of the organization in terms of finance responsibility.
Speaker: um So I was having discussions about, you know, the next steps and one of my options were going into the next generation project of ERP. Cause after, after 15 years, you know, the, the version of SAP that we were on was out of support. We, the company needed,
Speaker: um the next and best greatest version, a project that they're doing now. um But at the time, I thought to myself, ah is this the track that I want my next step of my career to go?
Speaker: um and as I was making those those decisions, I was also fielding ah offers from from different companies to fill CFO roles. Some of were public cfo public company CFO roles, um and others were private. And a lot of the companies that were reaching out really liked the diversity of experience that I had or around the different finance and operating um experiences.
Speaker: um There were companies that were also in transformation, um whether it be financial transformation or or other And ultimately, i got ah a really compelling offer from a company called Vince um and not Vince Camuto, Vince, Vince Holding.
Speaker: And Vince is a contemporary retailer ah in the apparel space, men's and women's. um And they really sit between um just under luxury. So it was a very similar business to Ralph Lauren, but different because it was a lot smaller business.
Speaker: um And the ah the company was going through ah their own financial transformation that I was really interested in in joining. So that was my my next step after after Ralph Lauren. Okay. Well, for anyone to last basically two decades at any company, let alone $8 billion dollars you know leader in fashion industry, that is pretty impressive. And it sounds like you know, all of the different roles and responsibilities you had really built your professional resume and portfolio. So, i you know, I don't doubt that recruiters were knocking down on your door and, you know, trying to get you into these roles. So it must have been a ah difficult decision to say, well, let me leave Ralph after so many years and take on, I assume, the CF role for Vince. Is that the role that you filled at that next stop?
Speaker: Yes, that's correct. it it was It was the CFO role at Vince. um um It was not an easy decision. And you know these large professional changes are are also life changes, right? It changes it changes your life. At Ralph Lauren, I had you know built a lot of great interpersonal relationships, business relationships across the company.
Speaker: ah moving to a completely different company, completely different people. You know you have to rebuild all of that. um And that takes a lot of ah you know time and effort and ah and interpersonal um investment.
Speaker: So... It wasn't an easy decision, but I felt like for the long term and the balance of my career, it was it was the right decision. And where you started, Mike, in terms of you know you know the ultimate finance role being the CFO, and it is true, but I really didn't spend my time or my career thinking focused on it. I really focused on you know what I was doing in the moment and what i what I was trying to accomplish and move forward in the role at the time with an appreciation that over time you learn more, you you build the tool set, and you provide your you know more value to the company and more value to yourself. And you really develop develop yourself that way.
Speaker: um And then over time, you know, if something like that came around, great, which it did. So I'm really happy that it did. But it wasn't kind of the the driving, you know, part part ah during during the course of my career.
Speaker: Okay. So you you were, let's call it at the end of your time at Ralph Lauren, you were a divisional CFO and you've had divisional experience before, but now you accept this offer at Vince, another retail line, and you are the CFO of, again, a publicly traded company. So is it an easy transition for you, like those first couple of weeks, or is it really like, you know, from out of the frying pan into the fire? Tell me about the experience of that.
Speaker: Yeah, it it was it was definitely drinking from a fire hose. um Day five encompassed ah me attending an investor conference to talk about the company's strategy, of which I had really five days experience in.
Speaker: um So that that was just an example of kind of the drinking from the fire hose experience it was. All great, though. I mean, I look back at it and every moment was a learning moment.
Speaker: um you know yeah Your first CFO job, you're going to not know something. um And I didn't know a lot, and but I was fortunate enough over time um you know to to you know have a really good Uh, CEO that one CEO that recruited me actually only lasted two months. Um, he had left the company after two months. So there was a lot going on within the company, ah in a very short period of time, just prior to me joining or just after I joined. And, uh,
Speaker: So it it was all there was some ah uneasiness and uncertainty during that that time. But I was also fortunate in um after after my first CEO that recruited me left the company, the the board appointed ex CFO, ah who was a board member, came in and became the interim CEO.
Speaker: um And it was really a blessing in disguise because I was able to really learn from my predecessor. um I was really really du ah ah learning from i what what the ex-CFO was watching out for from a risk perspective, what he was focused on on a day-to-day perspective, how he worked with the different business teams, ah how he helped develop develop strategy and support ah the company's strategy and the company's transformation efforts.
Speaker: So it was a really great experience in hindsight. um And it really made me appreciate how much ah how important liquidity is for any company. But you know for a company in in the apparel space with heavy seasonality, um it's really something that a CFO has to really work on daily, weekly, monthly. It's it's such a focus area.
Speaker: And at Ralph Lauren, I really didn't get exposed to it because the company was really ah literally printing money. The company had such great cash flows sitting on billions of dollars in cash, um which they still do today ah because it's such a strong brand, such a strong business.
Speaker: um That's not the case. It's not normal within the industry. So, you know, really learning about that, really learning about how to manage risk, how to manage cash flow, how to manage the company's liquidity.
Speaker: um Those are were all new skills that I had i was fortunate enough to build ah during my time Vince. So let's talk about that. About how long are you at Vince? And I know you're at the children's place now. Is that the next stop?
Speaker: Yeah, the children's place was the next stop. I was at Vince for about a year. um And towards the end of my tenure, the company went through a change of control. um the The new leadership had a different strategy, different point of view.
Speaker: um And I was working through that and and you know working through that pivot. But as as this was happening, I also got a call from from an ex-colleague from Ralph Lauren, um who knew about a the CFO role at the children's place being available.
Speaker: um He knew me, he knew what I could bring to the table and recommended me as as a candidate for this role. And ah you know as I was talking to to folks at the company, everything that I was really focused on that got me excited about the Vince role, the company transformation, they were going through and they they needed help with. So I felt like I could really move the needle there, um which is which is why i landed I landed at the children's place. And I've been there for you know over a year now.
Speaker: It's amazing how fast it goes. And you spoke about the relationships and the tough decision leaving Ralph to go to Vince. You had these great relationships and then, hey, it comes full circle again. And those relationships bring you to the next big stop in your career, right? Another CFO position of another another publicly traded company. So you must be doing something right to keep getting these jobs. So congratulations to you. That is fantastic. So Talk to me now about the children's place and what's happening there right now. Is it similar to what you were doing at VINC? Is it a very different type of entity or type of responsibilities? What's going on now?
Speaker: Yeah, it is. It's very different. First, it's it's about three times larger. So, you know, more more challenges, more headaches, more more lines of business to to manage, more more risk to to think through. um But every company actually is is very different in terms of where your focus is. As I, you know,
Speaker: the The different stops that I've had, um you know, at Ralph Lauren, Ralph Lauren was very design focused, marketing focused, ah consumer focused, which is the right way to be and in our industry.
Speaker: um Vince had a big wholesale business, a big department store business. ah So there was focus on wholesale at Vince. Other retail was really important, but wholesale drove drove the company.
Speaker: At the Children's Place, it's definitely more diversified, but very exposed to e-commerce. We have a big e-commerce business and a big store network. We have 500 stores at the Children's Place.
Speaker: um That sounds like a lot, but... Almost five years ago, we had almost a thousand stores. So the the store footprint has shrunk. The penetration of e-commerce has risen as a result. So the focuses are different. They're more technical. They're more ah performance marketing based because ah you know what what revolves around driving business within e-commerce is performance marketing.
Speaker: So ah it's really interesting seeing what's going on at the children's place. But at the end of the day, you know we're we're focused on transforming the company. um The company has declined and shrunk in terms of revenue. um And we really have a lot of efforts to make sure that the operating model matches the the size of the business going forward.
Speaker: um you We think we're in a leveling off place right now. So we're really trying to get the company ah cost structure to really align to where we are today, um which is no small effort. There's there's the organizational side.
Speaker: There's the operating side. um we We built a fulfillment network and a supply chain to support a $2 billion dollar business. And we're just north of a billion dollars.
Speaker: So you can imagine the kind of decisions that you have to make to, you know, right size of the network, right size your operations, right size your distribution. um And it's ah it's it's still ongoing, which keeps me busy every day.
Speaker: But let me bring up something else now. I'm not in the retail industry, the clothing industry, but I know we've been navigating current issues like tariffs. And then on top of it, I'm sure you have investor expectations. You have to be on earning calls.
Speaker: How do you handle all of these things in your everyday role? Yeah, it's been it's been one kind of fire drill, if you will, to to the next. you know Back almost you know two or three months after I started at the Children's Place, um the administration imposed tariffs ah for products that were produced overseas. And a company, an apparel company, typically produces most of their products offshore. We don't have ah big manufacturing for apparel in this country.
Speaker: So inevitably, you know there this tariff um situation was upon us. um And that was a big shock to the system because these were these were big numbers.
Speaker: So we had to figure out how how to absorb them. you know What was the plan? um Working with business teams on different pricing and promotional strategies to to try to absorb these these new costs that were coming um on top of the transformation that we were trying to move forward on.
Speaker: um You know, fast forward to this this ah late winter, early spring, you know, the conflict in the Middle East ah resulted in rising gas prices and rising grocery prices.
Speaker: um And for our consumer, that was impactful. That that really, um you know, took a bite out of their wallet where they had to make decisions about filling up their gas tank or buying their kids new clothes.
Speaker: Um, so that was an impact and that was a, that was a different set of challenges that we had to, to navigate. Um, there's, so there's no shortage of those kinds of challenges, but you've got to, you've got to take each, each problem statement and, and work on the solution.
Speaker: Oftentimes the solution isn't an immediate solve. There's not an immediate, um, you know, path, um, especially in our business where lead times are nine to 12 months to, to change product, uh, to adjust costing, uh, because lead times are, are, are rather long.
Speaker: So it's an evolution, um But we're fortunate enough where we have really good sourcing teams and um they're managing through this with our vendors. And, ah you know, we're also working on different strategies to um offset the tariffs. Luckily, now um we've got some refunds ah coming. So we have some offsets to those pressures, um but there'll be something else ah in the near future guaranteed that that we'll have to deal with. And again, it's about
Speaker: understanding the facts and circumstances and working with your partners ah and the experts really around you because you can't be the expert in everything um and relying on the experts to partner with you to get through and create the right right path.
Speaker: So when you're dealing with things like this, is it difficult to explain it to your investors or to have those earnings calls when you have news like this? How do you handle situations like that?
Speaker: Yeah. I mean, every every quarter um we we have an earnings release, we have discussions with the investment community, analysts, and our creditors. um So yeah, it's a delivering challenging news is not easy, um but you know in my experience,
Speaker: you really have to be fact-based um and take emotion out of the equation um and really try to articulate what you're doing about it. um And like I said, there's not always an immediate solve, um but as long as you create a you know the thought process and the strategies and and help the investor understand um the path forward over the longterm, we don't give guidance right now because we are in this transformation effort um And transformations are are not linear.
Speaker: um So it's really hard to give quarter to quarter guidance. But what what we try to do is give our investors kind of a North Star. um What are our goals in three years?
Speaker: Where do we see the company's different channels of business? How are they growing? Where do we see profitability in three years? And try to use the long-term view as those anchor points.
Speaker: for the investor, knowing that we're going to hit bumps in the road um and that we're going to navigate through those bumps. But over time, ah we're going to work to on the building blocks to get the company to where it needs to be.
Speaker: Yeah. that That makes a lot of sense. and and I totally get that. you know Sometimes you can't just be all about the short term. You have to think long term. But Let's throw one more iron into the fire here on issues we deal with. you know Now, the only thing people seem to talk about is AI, AI, AI, AI.
Speaker: How does AI affect your organization, your operations, and is there pressure from you know investors or you know board of directors that, hey, we need to be more efficient, we need to utilize more AI than we are now?
Speaker: Yeah, the the short answer is yes. and you know at the moment, there's no shortages of ideas on how to leverage AI. um For me, it's about prioritization um across all the other things that we want to do as a company. And and again, being in a transformation, you really got to make capital allocation decisions um and really stack rank all those projects, including the AI projects um in ah in accordance. So there are other things out there that we need to do. Like I mentioned, um we've got to reinvest in stores because our store count has changed so dramatically over time that requires capital.
Speaker: We have to invest in our website. That's an important part of our business that requires capital. We have to invest in technology across the organization, not just for the books and records of the business, but you know the technology that supports our design teams.
Speaker: But speaking of, you know we are using AI in different applications. i On the creative side, we are leveraging AI for our fit ah fit modeling. So instead of fitting on a live model, which is necessary, we're also doing it virtually ah to cut down on time and increase the the the throughput of of of the process.
Speaker: That's one example. But ai I would say, is really um you know coming to the fore in terms of a lot of the transactional efforts that we would be used to to do.
Speaker: One example I could give you is you know I could have one FP&A associate recap for me all of the earnings results of all of my competitors this quarter.
Speaker: It'll take him him or her three three to four hours using AI. Without AI, it would probably take two or three people, three or four days doing that. So just the productivity element and aspect of what AI can bring um is something that we're really looking at as an organization. um And teams are frankly clamoring for.
Speaker: They want to be more productive. They don't want their heads down in the weeds. They want to pick their heads up and be thought partners for their departments, be thought partners for their business partners.
Speaker: um And that's, I think, what really AI is about. It's about enabling ah productivity and enabling more ah your finance team to be more thought partners with the business.
Speaker: Well, I cannot tell you how appreciative I am of you walking us through your career like this. And it really is amazing from graduating in a bad job market and going to a tobacco company, going to a paper company, going to a Fortune 500 retail fashion house, dealing with PE backed turnarounds and you know major retail restructuring. It's an absolutely amazing career and the experiences that you've had to navigate through. But I'm just trying to think like personally, how do you stay grounded? How do you stay anchored? Like you're going to be dealing in a lot of stressful situations. How do you stay consistent in your approach to your work?
Speaker: Yeah, it's ah it's a great question. And sometimes you get so caught up in the work, it's hard to take a step back. um And I would say my my time at the children's place is probably the hardest I've worked in my career, but and it's different type of work, right? it's not It's not grinding on a keyboard or in an Excel spreadsheet. It's it's really thinking and and problem solving and partnering. And also, you know, one aspect that we really didn't talk about is leading and developing people.
Speaker: And I think that is really important. It's a really important aspect to any leader, but certainly from from the CFO chair, you really have to spend a lot of time really thinking about your people, thinking about people development.
Speaker: um So less of the doing and more of the developing of the people and the strategies and really setting your teams up for success. But beyond that, you know, taking a step back and really forcing myself to have some downtime, downtime with friends, downtime with family.
Speaker: um i really love the game of golf. I haven't been able to play it as much recently as as I had in the past. And my handicap shows it. But You know, every now and again, I'm able to get out with family and friends and and spend some quality time on the golf course in nature outside, you know, thinking about that little white ball instead of of the problems that that you have ah in the day to day the day to day work workplace. um So I try to do that. i try to balance in the wintertime. I try to balance that with skiing because you can't play golf in the snow. Yeah.
Speaker: And then also really taking time for myself on almost, you know, try to do, ah you know, a really rigorous rigorous workout for three to four times a week. Just try to get the blood flowing and and clear the mind of of the stress and um really trying to, you know, do things for for myself. Yeah.
Speaker: And my family, which is really important. And so striking that balance, it's not always easy. And it's harder and harder as you take on ah more responsibility in your career. But you also have to sometimes force it and take that time for yourself, um for for your health and for the health of your relationships.
Speaker: I totally agree. and Like you, i do love to play golf. I do love to ski. Unfortunately, there's just not enough hours in the day that we would like. But yes, I'm going to make sure that I make time this year based on those words that you said. That's some really good advice there. And what's your workout? Like, are you a kind of a freeway guy? You go to the gym? how do you work out?
Speaker: Yeah, i I used to do a lot of outdoor running until my knees started to tell me not to. um But now what I do, I do a really rigorous um ah what they call HIIT class ah and high intensity training, they call it. And um it's really great to get the heart rate going. And I do it three, try to do it three times a week.
Speaker: Try to, do if not four. And again, it really helps to, you know, clear the mind and reduce the amount of stress in in a pretty stressful job. Well, John, i don't want to keep you anymore. You know, you've been so generous with your time and sharing all this information and in the insights. I'm going to ask you one last question and then I promise that's it.
Speaker: If there's someone listening to this right now, and let's say they're still working in public accounting and they're thinking, well, maybe finance is the role for me. Maybe I want to make a switch. Since you've done it, is there any advice you could share with someone who might be thinking about changing from one area to another?
Speaker: Yeah, what what I would say is I think there is a a natural ah progression from accounting and being a CPA into corporate FP&A and corporate finance. I actually prefer hiring CPAs into my FP&A group.
Speaker: ah Because they have a leg up, frankly, in in terms of the financial um the financial acumen. and And again, the language that you need to develop in that partnership with the accounting group and the accounting function.
Speaker: um So it's really important and I think it's it's very natural. um And i think I think it also um is a big leg up in relation to ah providing value for the FP&A function ah to have the underpinnings of accounting.
Speaker: um And it really can help the company and it can really help the function ah dramatically. Well, John, you said it all. Thank you so much, my friend, for really taking the time and to be so patient and answer all of these questions. I wish you all the best of luck and success at the Children's Place. But sounding what you have with your experience and background, I'm sure you don't need luck. You're going to be making your own luck. But it's been great to have you as a guest. So thank you so much for being here.
Speaker: Thanks, Mike. I really appreciate the time and thanks for having me. And I just want to let everybody else out there listening to this know that you can actually earn CPE credits for this. All you need to do is just visit the notes, click on the link, and you could register for your CPE credit.
Speaker: And even better news is if you're a prime CPE subscriber, you could earn the CPE credit at no extra cost. Just log in to finalize your credit. So that's everything we have for this week on this episode. John, again, thank you so much. I really appreciate it. Hopefully you and I will get to do this again one time at a future date.
Speaker: But for now, that's it, everyone. Hope to see you in another Becker Accounting Podcast in the future.
