SUNLAND — Cherokee Inc.'s Chairman and Chief Executive Robert Margolis resigned Monday, rekindling speculation that French designer Georges Marciano, a Cherokee investor, wants to take a more active role in the women's clothing maker.
The 45-year-old Margolis, a 13-year veteran of Cherokee who recently steered it back to profitability after it emerged from a bankruptcy reorganization, said he was leaving the company to pursue other entrepreneurial interests.
Cherokee's stock rose $1.13 a share on the news, to close Monday at $6.25 in Nasdaq composite trading.
Margolis could not be reached for comment.
He said in a statement: "Now that the company is on a firmer financial footing and has reported a profitable first quarter, I feel the time is appropriate for me to step aside so that the new management team can focus on maximizing the potential of Cherokee's brand name and other strengths in today's marketplace."
Cherokee posted net income of $297,000 for its fiscal first quarter ended Aug. 28, in contrast with a loss of $4.28 million a year earlier. Sales were down 17%, however, to $34 million, from $41 million a year ago.
The rumors surrounding the 46-year-old Marciano's interest in running Cherokee began circulating in August, when he resigned as chief executive of Guess? Inc. Marciano and his three brothers founded the Los Angeles-based clothing company.
Marciano, who in June bought a 19.9% stake in Cherokee for $4.1 million, could not be reached for comment on his plans in the wake of Margolis' resignation. But Cherokee's Chief Financial Officer Cary Cooper said: "Mr. Marciano is an investor in the company and has never evidenced any interest in being anything else."
Leon Greenblatt, a principal in Scattered Corp., a Chicago broker-dealer that owns about 12.9% of Cherokee, said: "The stock market seems to think Marciano is going to be involved." Cooper said Cherokee's board will form a committee to search for a new chief executive. Until one is hired, the post will be filled by Bryan Marsal, a 42-year-old partner in the New York-based management-consulting firm of Alvarez & Marsal.
Margolis will remain a consultant to Cherokee's board, probably for a year, Cooper said.