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An Iconic Brand Pulls Its New CEO Off the Glass Cliff

BERLIN, GERMANY - MARCH 08: In this photo illustration Levi’s 501 blue jeans by U.S. clothing manufacturer Levi Strauss are seen on March 8, 2018 in Berlin, Germany. U.S. President Donald Trump has promised to sign into law tariffs on imported steel and aluminum today and the European Commission has vowed to retaliate with tariffs on Levi’s jeans, Kentucky bourbon and Harley-Davidson motorcycles. Many analysts fear the tariffs could escalate and hence cost jobs on both sides of the Atlantic. The European Union and Canada are the world’s biggest exporters of steel to the United States. (Photo by Sean Gallup/Getty Images) (Photographer: Sean Gallup/Getty Images Europe)

Women currently run 46 Fortune 500 companies — a mere 9% of the biggest corporate enterprises in the US by revenue. That also happens to be a record, even if it is a depressing one.

When you’re talking numbers this small, every single arrival and departure matters. So when news broke last week that Michelle Gass would step down as the chief executive officer of Kohl’s Corp. early next year to become CEO-in-waiting at Levi Strauss & Co., C-suite watchers mourned the shrinking of this exclusive group of women. With $5.8 billion in 2021 annual revenue, Levi’s is about a third the size of Kohl’s. And while an influential and culturally important brand, it doesn’t make the Fortune 500 cut.

The closely watched count of female CEOs is often used as a gauge for measuring the state of women in the workplace. If the number creeps up, progress! If it falls, we’re regressing! But in some cases, like this one, the metric oversimplifies a more complex narrative. Gass’s exit from Kohl’s is in fact not bad news. Yes, the Fortune 500 will lose one of its rarified female CEOs. But Gass’s next gig reflects a real shift in how women who have reached the very top are not only perceived but also valued.

For one thing, there’s the fact that Gass even has a new CEO gig to move to. It’s highly unusual for women to get a subsequent top job at a high-profile company. Since 2004, 22 men have achieved that distinction among S&P 500 companies, according to executive search firm Spencer Stuart. The number of women? Zero. And during the same period, only three women have been repeat CEOs of a Fortune 500 enterprise: Meg Whitman at eBay Inc. and Hewlett Packard Enterprise Co; Susan Cameron, who had two separate stints as head of Reynolds American Inc.; and Mary Dillon at Ulta Beauty Inc. and Foot Locker Inc. And it’s almost unheard of for a struggling female chief executive — as Gass has been at Kohl’s — to get another shot at the top job. The retailer has slashed guidance as its core customer base pulled back on spending, and Gass’s big bets — like partnering with Sephora and Inc. — failed to turn the company around. Activists had called for her ouster.

If history is any indicator, here’s what was supposed to happen: Gass would have eventually retired — likely not by choice — and from there joined a few more corporate boards, maybe a venture capital or private equity firm. Essentially, she would have “disappeared,” as Jennifer Reingold wrote in Fortune in 2016 when untangling the thorny question of why so many accomplished executive women simply vanish from the corporate world.

The problem is systemic. Women are often tapped to run struggling companies or those in crisis — basically roles men don’t want to touch. Reingold’s piece cited data from Utah State University that found that 42% of women CEOs of Fortune 500 companies through 2014 were appointed during times of crisis, versus 22% of male CEOs.  When women ultimately struggle in these precarious jobs, they are viewed as unviable candidates for other opportunities. “There’s not a lot of margin for failure for women CEOs,” Marianne Cooper, a sociologist at the Stanford University’s VMware Women’s Leadership Innovation Lab, told me.

Gass stood at the precipice of this so-called glass cliff at Kohl’s. What made the difference for her is that current Levi’s CEO Chip Bergh recognized her impossible position. He told The Wall Street Journal that her time at Kohl’s should be taken within the broader context of the struggles facing department stores. “I came to the conclusion that Kohl’s is in a better place today than if she hadn’t been there,” he told The Journal. What’s rare is that Bergh publicly acknowledged that the glass cliff even exists and seemed to imply that perhaps having led through tumult makes Gass a stronger leader rather than a weaker one.

Also unusual is how Gass is entering the job. She’s joining Levi’s as president and will be in that role for up to 18 months before taking over from Bergh. It’s an unusual setup for an already-sitting CEO. In a statement to Bloomberg Opinion, a Levi’s spokesperson said the period would give the two “ample time to work alongside one another and map a smooth transition while also giving Michelle the opportunity to learn our business and get to know our team.” One could read this in two ways. The first is that Levi’s board or Bergh think Gass needs some extra hand holding. I’ll stop short of saying it’s unlikely this would ever happen to a man in the same position. The alternative scenario is that the up-to 18-month onboarding is an attempt by Bergh and the company to make sure Gass isn’t left standing on the edge of another glass cliff. I’m going to hope for the latter, and either way call it progress.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Beth Kowitt is a Bloomberg Opinion columnist covering Corporate America. She was previously a senior writer and editor at Fortune Magazine.

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