Gap Chief Executive Murphy `Expects More' With Overhaul of Namesake Brand
Peck takes on his new job after overseeing the company’s outlet stores, the San Francisco-based retailer said in a statement. Marka Hansen stepped down from the role, the chain said yesterday.
“I expect more from our Gap business in North America,” Murphy said in the statement. “The changes we’re making are intended to propel the brand to deliver the product and brand experiences our customers demand worldwide.”
Since Murphy arrived in 2007, he’s cut costs and closed stores to boost profitability. Now he’s aiming for revenue growth at U.S. locations, said Richard Jaffe, an analyst for Stifel Nicolaus & Co. in New York. Sales have improved at the company’s other major divisions, Old Navy and Banana Republic, while the Gap brand has lagged behind, he said.
While Hansen oversaw successes such as the introduction of 1969 Jeans and black pants, overall the clothes weren’t unique and failed to draw consumers and boost so-called same-store sales, Jaffe said.
“Change was needed at the Gap division,” said Jaffe, who recommends buying Gap shares. “This is a good thing.”
The retailer declined 49 cents, or 2.5 percent, to $19.03 at 4:01 p.m. in New York Stock Exchange composite trading. The shares gained 5.7 percent last year.
Old Navy, Banana Republic
Gap North America’s same-store sales, which exclude new and closed stores, were little changed in the 39 weeks through Oct. 30. Sales by that measure gained 2 percent at Old Navy and 3 percent at Banana Republic in the same period. In December, purchases dropped 8 percent at Gap North America. The unit included 1,127 stores, or 37 percent of the retailer’s total locations, through October.
Seth Farbman will be chief marketing officer of Gap North America after a career at advertising agency Ogilvy & Mather, which the retailer has hired.
The namesake brand’s global creative hub for product and marketing will move to New York from San Francisco and be led by Pam Wallack, who was president of Gap North America’s adult division. Patrick Robinson remains head of global design.
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