Gap brand CEO gets the boot
NEW YORK: Gap Inc said on Tuesday that it was disappointed with the progress at turning around the fortunes of its eponymous brand and that the head of the business, Jeff Kirwan, was leaving.
The surprise move comes just over a week before the apparel retailer is to announce fourth-quarter results.
“While I am pleased with our progress in brand health and product quality, we have not achieved the operational excellence and accelerated profit growth that we know is possible at Gap brand,” Gap Inc’s chief executive Art Peck said in a statement.
The company is trying to tackle muted sales and a shift in consumer preference to online shopping by spending more to refresh underperforming lines, spruce up online offerings and bring new styles quicker to its stores.
Gap Inc raised its 2017 earnings and same-store sales forecasts in November, likely reflecting traction with those initiatives. But those efforts are shining through mostly at Old Navy, while Gap, the company’s second-highest revenue generator, finally turned a corner only in the third quarter.
“While we remain confident in Old Navy’s ability to post solid results against difficult comparisons, we have less confidence in an operational turn at Gap banner in the short to medium term,” KeyBanc Capital Markets analyst Edward Yruma said.
He expressed concern that the issues around the brand’s products, perception and store fleet “may be difficult to fix.”
“I think it’s just frustrating because in their last earnings report there was a lot of optimism that Gap was making a come back and at this point it indicates it really has not,” said Gabriella Santaniello, CEO of retail consultancy firm A-Line Partners. “Ultimately this is the right decision.” Kirwan, who had led the Gap brand since December 2014, is not featured on the leadership section of Gap Inc’s website.
Brent Hyder, Gap Inc’s head of global talent and sustainability, will oversee the Gap brand in the interim. Hyder was previously chief operating officer of the Gap brand.