Can Old Navy’s boss lead a turnaround at Gap Inc.?

Discussion
Photo: Gap Inc.
Mar 06, 2020
George Anderson

Gap Inc. didn’t have to look far for a new chief executive to replace its former CEO, Art Peck. The specialty clothing retailer has announced that Sonia Syngal, CEO of Old Navy since 2016, will be the next executive to lead the company, effective March 23.

“We sought a dynamic leader who could bring a deep respect for our customers and make the decisions necessary to deliver value from our portfolio of brands over the long term,” said Bob Fisher, interim Gap Inc. CEO and chairman of the company, in a statement. “Sonia has all of the characteristics and experiences needed to effectively execute against the work ahead. She is an excellent operator who drives innovation and decisive action, and she leads with both vision and heart.”

Ms. Syngal, who has been with Gap since 2004, will also take a seat on the company’s board.

While short on specifics, Ms. Syngal said, “I’m committed to fully realizing the potential of our portfolio and the advantage of our scale, with a focus on strengthening the love that our millions of customers have for our brands. To do that, we must better prioritize initiatives and capabilities that will improve execution and drive value creation.”

The move to put her in charge of the overall business is interesting in light of the on-again, off-again decision by Gap Inc. to spin off and then not spin off Old Navy. In the spinoff scenario, Ms. Syngal was to lead Old Navy as a standalone business.

Gap’s management and board came to the decision to keep Old Navy in January, concluding that the complexity of making it happen and the relative value of doing so would negatively affect the business.

At the time of the decision, Mr. Fisher said that he did expect the process of exploring a spinoff would benefit Gap going forward after it had identified “operational inefficiencies” and other areas where it could improve performance across its banners.

“We have learned a lot and intend to operate Gap Inc. in a more rigorous and transformational manner that empowers our growth brands, Old Navy and Athleta, and appropriately focuses on profitability for Banana Republic and Gap brand,” Mr. Fisher said. “Our board is focused on supporting this work and appointing new leadership with the appropriate experience necessary to lead a portfolio of retail brands and to support our transformation efforts.”

Gap Inc. is set to announce its fourth-quarter and full-year earnings on March 12. Former CEO Peck stepped down from the company in November after the Banana Republic, Gap and Old Navy all reported same-store sales declines.

DISCUSSION QUESTIONS: Is Sonia Syngal the right executive to lead Gap Inc. at this time? What do you think are likely to be her biggest priorities, and what will she need to accomplish her goals?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The board has faith in her, which means she'll likely have the flexibility and resources to be able to help the broader company pivot faster."
"What’s most important is that Gap doesn’t simply become an Old Navy variant. It can learn from Old Navy, but it must not become Old Navy."
"The recent new leadership (once again) quoted in this article draws attention to the elephant in the room, corporate jargon written for shareholders, not customers."

Join the Discussion!

12 Comments on "Can Old Navy’s boss lead a turnaround at Gap Inc.?"


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Brandon Rael
BrainTrust

All of the Gap Inc. companies have strong brand equity and are omnipresent in malls, strip malls, and local downtown shopping centers. The times have certainly changed, and while the new Gap Inc. CEO, Sonia Syngal inherits the reigns of a company that has a scale and reach that few other companies have, there certainly are transformative needs to take place in order to bring the company back into prominence.

Under Sonia Syngal’s leadership, Old Navy’s sales increased by $1 billion over a three-year period ending in early 2019. In addition, the Old Navy’s digital transformation led to the fast growth of Old Navy’s e-commerce channel, now a $1.6 billion business. However all of the brands, including Old Navy, have their work cut out for them.

It will not be just about operational efficiencies, especially for Gap. The most critical need is to restore the brand purposes, and what differentiates the Gap, Banana Republic, etc.

Neil Saunders
BrainTrust

I think this is a sound appointment. Sonia Syngal knows and deeply understands the business and, despite some recent soft results, has a great track record at Old Navy.

If she follows the Old Navy playbook then we can expect Gap to become a more nimble business that is more reactive and receptive to trends and tries to inject that newness into ranges. That, in itself, will help.

However, Gap is more complex than Old Navy. The customer demographic is wider. The brand is fairly tarnished. Some of the merchandising changes needed are subtle. And a new position and brand essence are needed. So there are no easy or quick fixes and Syngal will have her work cut out for her.

What’s most important is that Gap doesn’t simply become an Old Navy variant. It can learn from Old Navy, but it must not become Old Navy.

Lee Peterson
BrainTrust

Does 16 years with the company signal change? Uh, no. I read that as “stay the course.” Let’s hope she surrounds herself with the right people, those filled with new ideas from somewhere else, as the past 16 years has seen a LOT of changes at retail that Gap has not kept up with, or can’t keep up with. All the best, Sonia.

I can’t help but point out as well, she’s got that corporate jargon DOWN, doesn’t she? “Better prioritize initiatives and capabilities that will improve execution and drive value creation” — just what does that mean? Sorry, my jargon meter just hit tilt with that one.

Brandon Rael
BrainTrust

I guess we are so immune to corporate jargon that this one slipped by me! Thanks for calling this out! This is most definitely PEAK corporate jargon for 2020.

Gene Detroyer
BrainTrust

Can I award an “A” for the decision to bring in Ms. Syngal? I wish her the best to accomplish a very tough job.

We often forget that retailers are brands, not stores. Once the Gap brand resonated with shoppers. Today that same brand does not. The more successful a brand is the more difficult it is to change what it stands for. You can change everything inside the store, but it is very difficult to change what is in people’s heads.

Bethany Allee
BrainTrust

The board has faith in her, which means she’ll likely have the flexibility and resources to be able to help the broader company pivot faster. Old Navy is winning in the industry and kudos to the larger Gap organization for putting more strength into what’s working vs putting resources into the sinkhole that is focusing on what’s not working. Her biggest priority is likely to reinvigorate each of the brands and tie them closer together. By doing this, she can also leverage Old Navy’s foot/online traffic.

Cynthia Holcomb
BrainTrust

The recent new leadership (once again) quoted in this article draws attention to the elephant in the room, corporate jargon written for shareholders, not customers. Gap product vision continues to be missing in the new Gap leadership. It is disheartening to observe the slow-motion deterioration of the Gap brand based solely on leadership seeking shareholder approval. Gap has a tremendous advantage which has been wasted for years now due to lack of product vision and product passion. Gap’s supply chain manufactures quality garments in really nice materials, yet consumers don’t care. I bet there are true product visionaries already embedded within Gap who have not been given a voice due to the continuous short term courting and appeasement of shareholders. A true retail tragedy.

Jeff Sward
BrainTrust

Ironic, to say the least. From calling off the split to elevating Sonia Syngal. I’m exhausted from ranting against the split. And I’m immune to all the speeches. I’m only going to pay attention to one thing. The October floor set for the holiday season. Everything before then is deep in the pipeline. And who knows what can still be affected. This is a “through the eyes of the customer” challenge, not a balance sheet or operational issue.

Peter Charness
BrainTrust

Yada yada yada … fix the product. Unfortunately, that’s a 9 month journey before any results can be seen.

Paco Underhill
BrainTrust

Most peoples’ closets divide into uniforms and costumes. Uniforms are worn Monday thru Friday — to work and to play. Costumes are worn on Saturday night and sometimes on Sunday. The Gap prospered when it was clear in-store, in visual merchandising, etc., that it was in the uniform business. The key is making it unambiguous — you can wear this to the business casual office and/or that Thursday night date. Customers find a uniform solution and go back. Speaking personally as a tall man, there is not a single pair of pants at the Gap I can buy in-store — they don’t stock 36 inch inseams. Hope she can correct that!

Jeff Sward
BrainTrust

I’ve used the term “wearing moments” to describe different end use needs a single customer might have. There are lots of different wearing moments throughout the week. But “uniforms” and “costumes” is terrific shorthand.

Craig Sundstrom
Guest

I wish Ms. Syngal the best. Unfortunately, she’ll probably need (a lot) more than my well wishes to reverse two decades of lackluster performance.

wpDiscuz
Braintrust
"The board has faith in her, which means she'll likely have the flexibility and resources to be able to help the broader company pivot faster."
"What’s most important is that Gap doesn’t simply become an Old Navy variant. It can learn from Old Navy, but it must not become Old Navy."
"The recent new leadership (once again) quoted in this article draws attention to the elephant in the room, corporate jargon written for shareholders, not customers."

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