Gap shares plunged more than 20% on Friday after the mall-based clothing giant slashed its sales forecast and announced the CEO of its Old Navy chain was leaving the company.
The abrupt departure of Nancy Green, who was named chief executive of Old Navy nearly three years ago and had held senior roles at Gap since 2009, came amid a steeper sales decline than expected in the budget chain – once the retail darling in the Gap Wallet which also includes Athleta and Banana Republic.
As the apparel giant’s top-selling brand, Old Navy was to be spun off in 2020, but plans to split were scrapped that year shortly after Gap CEO Art Peck unexpectedly resigned in 2020. November 2019.
“As we seek to capture the potential of Old Navy, particularly amid the macro-economic dynamics facing our industry, we believe the time is right to bring in a new leader with operational rigor. and creative vision to implement the brand’s unique value proposition,” Gap CEO Sonia Syngal said in a statement Thursday. Syngal is temporarily assuming leadership of Old Navy, the company said.
The San Francisco-based company on Thursday also lowered its first-quarter sales forecast to low to mid-teens declines from a year earlier, largely due to “ongoing challenges at Old Navy,” according to a note. research from Wells Fargo analyst Ike. Boruchow.
Gap attributes much of its woes to supply chain disruptions that left some stores without enough merchandise during the crucial holiday season.
But at Old Navy stores, the problem seemed to be a lack of merchandise consumers wanted to buy.
Syngal said the chain had “increased promotional levels” and that Gap was taking a “more aggressive approach to assortment balancing.”
New York Post
If you have any query regarding content, please comment below. Thanks