Gap CEO steps down amid struggling sales
The news comes as the company confirmed it expects net sales in the second quarter fiscal 2022 to decline in the approximately high-single digit range, relatively in-line with its prior expectations
Gap Inc. has revealed that president and chief executive officer Sonia Syngal will step down from her position and from the company’s board, departing the company following a brief transition.
Effective immediately, Gap confirmed Bob Martin, the company’s current executive chairman of the board, will serve as Gap Inc. president and chief executive officer on an interim basis. Mayo Shattuck will continue to serve as lead independent director.
Bob Martin is a 40-year industry veteran with “extensive” retail experience at corporations including Dillard’s Inc. and Walmart where he served as CEO of its International division. He has served on the Gap Inc. Board since 2002, as lead independent director from 2003 to 2015, and as executive chairman since 2020.
The news comes as the company confirmed it expects net sales in the second quarter fiscal 2022 to decline in the approximately high-single digit range, relatively in-line with its prior expectations.
It added it “continues to navigate margin headwinds” and, as previously communicated, still expects to incur an estimated $50m (£42.2m) of transitory incremental air freight expense in the quarter as well as inflationary costs on raw materials and freight.
In addition, it has taken a “more aggressive approach” to assortment balancing resulting in increased promotional activity during the quarter, which it expects will have a negative impact on gross margin in the quarter.
Syngal said: “Leading this great company and our 100,000-strong employees since 2020, through unprecedented challenges for our industry, and society, has been an immense honour. Through it all, Gap Inc. and its dedicated teams have seized change as an opportunity, restructured for future growth, crystallised unique brand identities rooted in cultural relevance and fiercely chased transformation.
“With an exceptional and industry-leading CEO for Old Navy now appointed, I am thankful to have the board’s support in stepping down, ushering in a new opportunity for fresh perspective and rejuvenated leadership to carry Gap Inc. forward.”
She added: “The company’s co-founders, Doris and Don Fisher, created a lasting and undeniable legacy for Gap Inc. as a company with a heart. It is a home for creatives, innovators, data scientists, operators and customer advocates, to build their careers and break boundaries, just as it enabled me to do the same.”
Martin said: “My fellow board members and I want to thank Sonia for her steadfast leadership and many contributions to Gap Inc. during her 18 years with us. Most notably, amidst significant global disruption, social unrest and economic instability, Sonia had an immediate impact as Gap Inc. CEO, establishing a clear strategic direction and cultural identity that has united this global enterprise as a force for good with powerful brands poised to stand the test of time.
“While a search is underway, the board has complete confidence in the formidable leadership team to guide the company through this transition. And I look forward to championing this incredible team as they continue to write Gap Inc.’s next chapter with grit and passion.”
The company also announced that Horacio “Haio” Barbeito will join the Gap Inc. Leadership Team as president and chief executive officer of Old Navy