Two executives instrumental in the recent start-up of the Fashion Channel have resigned abruptly from the company, which airs a cable-TV program that sells apparel, cosmetics and accessories to home viewers.
The resignations of Raymond L. Klauer, vice chairman and chief operating officer, and Wayne C. Smith, president, were announced late Friday. They come as home-shopping companies, which had a fleeting moment in Wall Street's spotlight, have fallen out of favor as the industry has failed to live up to expectations.
"They are going to pursue other interests," said company Chairman and Chief Executive Charles W. Gee II. "They're still consulting for the Fashion Channel." No replacements have been named.
Gee said the two executives, whom he has known for about 1 1/2 years, are leaving on the "very best terms" and that "they happen to be my best friends." He said the decision to resign was a personal one for both Klauer and Smith.
"In the case of Ray Klauer, the job is demanding six or seven days of work (per week)," Gee said. "He has been putting in those hours for the last couple of months. His wife preferred that he not."
Gee said Klauer, 57, will travel to New York next week to advise some of the company's clothing buyers. Klauer is a former president of May Co. California and retired as vice chairman of its parent company, May Department Stores, in 1983.
From its base in a renovated Carson warehouse, the Fashion Channel Network officially began its 24-hour-a-day programming Oct. 1, three months behind schedule and a day before a $21-million public offering in which the company began trading on the over-the-counter market. Less than three weeks later, the market crash sent stocks into a tumble. Fashion Channel's shares have fallen from $10.50 to $4.50.
In addition, the company, which has 400 employees and offers programming to an estimated 9 million households nationwide, last month reported a $9.6-million loss for the nine months ended Oct. 31, on sales of $313,000. The losses were blamed on start-up costs.