(Bloomberg Opinion) -- An overdue change is coming to Gap Inc.
The retailer announced Thursday that CEO Art Peck, who has led the company (which also includes Banana Republic and Old Navy) since 2015, will step down. The company’s chairman, Robert J. Fisher, will serve as interim CEO while the board hunts for a successor.
Under Peck’s tenure, the clothing retail empire never found its stride. The namesake chain has struggled with merchandising issues, from ill-fitting garments to unfashionable looks to the wrong mix of tops and bottoms in its stores. Banana Republic erred by veering too trendy instead of sticking with the sleek, classic professional attire its customer sought. Both brands have gotten stuck in a spiral of near-constant discounting, relying on “40% off” promotions to carry the business when the fashion itself wasn’t enough to get people in the door.
Old Navy, which for many years was the rare bright spot of the Gap business, has recently started to sputter. It, too, has had problems with its merchandise, failing to deliver the right mix of print and patterns.
The company said Thursday comparable sales were down 4% in the third quarter, a dismal showing that reflected declines at all three major brands.
Plenty of other leaders have effectively taken the blame for Gap’s woes in the Peck era. Rebekka Bay, Gap’s one-time creative director, was pushed out in early 2015 after Peck was named CEO. Marissa Webb, creative director at Banana Republic, departed later that year. Andi Owen, the president of Banana Republic, departed in 2017. Jeff Kirwan, president of Gap brand, was axed in 2018 as the brand struggled with major inventory management issues. Owen and Kirwan, in particular, had been handpicked by Peck to lead a comeback.
After all those senior-level castoffs, it has become abundantly clear that Peck is the one who bears responsibility for Gap’s inability to mount a turnaround. And after nearly five years, it is also clear that he did not have the answers to Gap’s problems.
It was surprising that Peck did not vacate the CEO role earlier this year when the company announced its plan to split into two, with Old Navy set to become a standalone business. It seemed like a natural moment for a fresh start.
Of course, whether or not Gap and Banana Republic are better off depends on who the board is able to convince to step into Peck’s shoes. But board members made the right call by seeking a leader with fresh vision.
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Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.
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