Gap CEO Art Peck to step down
In an unexpected turn of events, Art Peck is leaving Gap at the age of 64. Having joined the American fashion group in 2005 and taken on the role of CEO in early 2015, the former head of Boston Consulting Group will be succeeded by the chairman of Gap's board.
Robert J. Fisher, heir to the company's founding family, has been announced as interim CEO of the group, whose brands include Old Navy, Gap, Banana Republic, Athleta, Intermix, Janie and Jack, and Hill City. Having worked at the company for 35 years, he has been on Gap's board since 1999 and took on the responsibilities of chairman in 2015.
“On behalf of the entire board, I want to thank Art for his many contributions to Gap Inc., spanning a nearly 15-year career with the company,” said Fisher in a release. “Under Art’s tenure as CEO, we have made progress investing in capabilities that bode well for the future such as expanding the omni-channel customer experience and building our digital capabilities.”
News of this major change comes on the heels of Gap's announcement of a plan to reduce its brick-and-mortar fleet, but also as the group prepares to spin off the Old Navy brand as a separate company, a split which should be completed in early 2020. It remains to be seen whether the post-separation plans to get Gap back on its feet by refocusing on denim will have the desired results.
On top of this, the group also reported declining quarterly revenues on Thursday. Comparable sales at the group were down 4%, reflecting decreases of 7% at Gap, 3% at Banana Republic and 4% at Old Navy.
“This was a challenging quarter, as macro impacts and slower traffic further pressured results that have been hampered by product and operating challenges across key brands,” explained Gap EVP and CFO Teri List-Stoll.
Between the company's declining sales and the announcement of Peck's departure, shares in Gap were down 7% to $16.75 at the closing bell on Thursday. At the start of the year, the company's shares were $25.75.
Last year Gap reported annual revenues of $16.6 billion.
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