Gap is looking for a new chief executive after announcing that Art Peck was to step down following a brief transition.
Peck had led the fashion retailer as it grappled to adapt to digital and omnichannel retailing. But his departure after 15 years at Gap came as the retailer, whose UK presence is ranked Top250 in IRUK Top500 research, said that global sales continued to decline across its key brands.
Third-quarter sales at Gap were down by 7% for the quarter to November 2, as they had also been last year. Sales for the same period at Banana Republic were 3% down; a year ago they were 2% up. And Old Navy sales were 4% down on last year, when they had risen by 4%.
“This was a challenging quarter, as macro impacts and slower traffic further pressured results that have bene hampered by product and operating challenges across key brands,” said Teri List-Stoll, executive vice president and chief financial officer at Gap. “We have tremendous confidence in our brands and the talented organisation that supports them and we are seeing progress in some key areas. However, there is more work to do to leverage the capabilities we have invested in, and deliver the profitable growth we know these brands are capable of delivering.”
Robert J Fisher, Gap’s non-executive chairman, will stand in as chief executive until a replacement is found for Peck. He is a member of the family that founded Gap and has previously served as interim president and chief executive. Fisher thanked Peck for his contribution and said: “Under Art’s tenure as CEO, we have made progress investing in capabilities that bode well for the future, such as expanding the omnichannel customer experience and building our digital capabilities.”
He added: “As the board evaluates potential successors, our focus will be on strong leadership candidates with operational excellence to drive greater efficiency, speed and profitability. In the meantime, we will continue to focus on leveraging the power of our brands and the talented teams that lead them to improve execution and better position the portfolio for growth.”
In March, Gap said that it would close a net 30 stores, while also splitting its business into two parts, of which one would be Old Navy and the other Gap, Banana Republic, Athleta, and its other brands. At the time, Gap also showed that it was holding 10% more unsold stock than it had been a year earlier. The latest update of continued sales decline suggests that excess stock may continue to be an issue in the business.
Image: Screenshot of Gap.co.uk/InternetRetailing Media