Gap shares fell on Tuesday after the retailer said the president and chief executive of its eponymous brand will leave the company.
Shares in the San Francisco-based company tumbled as much as 7.6 per cent to $30.75 before trimming those losses to trade down about 3.5 per cent. The moves come after the retailer behind brands including Old Navy, Gap, Banana Republic and Athleta said Jeff Kirwan would be leaving the company.
Mr Kirwan took the reins at the Gap brand in December 2014 — a move orchestrated by Gap Inc’s chief executive Art Peck — and helped overhaul its operating model to become faster and more responsive to consumer preferences while shrinking its store fleet. However, the brand has struggled to revive sales, with like-for-like sales declining on a quarterly basis for much of the last four years.
“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,” Mr Peck said. “As we move into the brand’s next phase of development, Jeff and I agreed it was an appropriate time for a change in leadership.”
Retailers have struggled to lure customers to their stores as mall traffic has declined amid a surge in online shopping. They also face competition from fast-fashion brands like H&M and Zara that mimic runway looks quickly and at lower costs. Their troubles were compounded by the rise of athleisure as Americans increasingly swapped denim for more comfortable athletic gear.
Gap is currently looking for a new president. Brent Hyder, current executive vice-president of global talent and sustainability at Gap, will oversee the brand.
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