New Gap boss filling big shoes
/
The new CEO of Gap (GPS) may have a tough act to follow.
Art Peck is taking over for Glenn Murphy, who will be stepping down in February. Murphy has been credited with helping turn around the retailer’s fortunes after taking over in 2007. The owner of Gap, Old Navy, Banana Republic and other stores has seen its stock price soar more than 150 percent since then. Yahoo Finance Senior Columnist Michael Santoli says Murphy did a lot with what little he had.
“Murphy has done a really good job when you look at what he found there in 2007,” Santoli says. “He’s been harvesting cash flow, doing a lot of stock buybacks and dividends and not as much reinvestment in the stores.”
The 59-year-old Peck currently is president of the company’s digital division, and Santoli says he will need to use that expertise to boost revenue.
“He will try to make the ‘clicks and mortar’ story work a little bit better. Hopefully digital grows fast enough to offset the decline in the mall traffic, which has been challenged for a while,” Santoli notes.
Santoli believes Peck has one very big job ahead of him-- finding a way to make the namesake Gap stores more relevant amid slumping sales, which fell 3 percent last month.
“Old Navy is right in the price-cutting value track of retail. Banana Republic has the high end. What does that leave for Gap?”
The Gap brand accounts for almost 40 percent of the company’s revenues.
