Margolis Leaves Cherokee After 30 Years

After co-founding Cherokee Inc. in 1981, Robert Margolis is leaving the company, stepping down as the executive chairman of the board of directors.

According to a press release from the Van Nuys, Calif.–based company, Margolis’ exit has been in the works for months. “Mr. Margolis has worked closely with Chief Executive Officer Henry Stupp and the board to ensure an orderly transition process and to support Mr. Stupp as he further expands the company’s global growth strategies,” the statement said.

The release did not indicate what Margolis’ future plans were. Margolis has left the company before. After co-founding the apparel company—which transitioned into a licensing company for brands such as Cherokee, Sideout, Laila Ali, Carole Little and All That Jazz—he left in 1993 only to return in 1995. At that time, he was named chief executive until August 2010, when that title was passed on to Stupp and Margolis was appointed executive chairman of the board of directors.

Jess Ravich has been approved to succeed Margolis as non-executive chairman of the board.

“I am excited to witness the next dynamic phase of Cherokee’s growth and spend much deserved time with my family and grandchildren,” Margolis said in a statement. “I would like to thank our shareholders, board members and co-workers as it has been my privilege to serve as chairman and CEO for Cherokee for nearly two decades. This is the appropriate time for me to step aside in order for younger executives who are investing their money and their time to further build on the very successful international Cherokee brand platform and business model.”

Cherokee announced that the board of directors has approved a separation agreement for Margolis that allows for the acceleration of his compensation for the 2012 fiscal year. The company will purchase 400,000 shares of Cherokee’s common stock, valued at $18.15 each, in a private transaction.

To pay for the buyout, “The company has accepted a commitment from U.S. Bank, N.A. to provide Cherokee Inc. with a $10 million term loan facility to finance the transactions with Mr. Margolis,” the statement said.

Separately, Stupp and Ravich will buy 10,000 and 50,000 of Margolis’ common shares, respectively, under the same terms.

“This transition is an important milestone for Cherokee. Having the support of the board in order to pursue prudent acquisitions and growth strategies to more fully capitalize on our global platform is gratifying,” Stupp said in the statement. “Our goal is to grow the company utilizing its financial strength, its global brand awareness, industry-leading retail partners and, of course, the hard work of my associates.”

Ilse Metchek, president of the California Fashion Association, said Margolis’ exit is unexpected. “Bobby staying home and playing golf is an oxymoron. I can’t imagine the industry without him. I think he’ll have his finger in the pot soon enough.”—Erin Barajas