Drugstore Exec to Take Charge of Gap
Gap Inc. has appointed Glenn Murphy as its new chairman and chief executive officer. Mr. Murphy has over 20 years of
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Glenn Murphy, chairman and chief executive officer, Gap Inc.
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retailing experience, most recently as chairman and CEO at Shoppers Drug Mart in Canada. His career also includes stints with Loblaw Companies and Chapters, a book retailer.
Mr. Murphy replaces Robert Fisher who served as interim CEO while the company conducted its search.
“Glenn is known for being a decisive leader with great retail instincts who understands his customers,” said Mr. Fisher in a company press release. “He has revitalized major retail brands by offering new products and significantly improving the store experience. He’s well qualified to return Gap Inc. to the level of sustained performance we all expect.”
Adrian Bellamy, chairman of The Body Shop International and Reckitt Benckiser, led Gap’s search for a new leader.
“When we met Glenn the entire board unanimously agreed that we’d found the right leader for our company,” said Mr. Bellamy. “His proven retail skills and demonstrated financial results complement the strong brand leaders we have running our core businesses. We are confident he will prove to be a very successful leader of our management team in the years ahead.”
As CEO of Shoppers Drug Mart, Mr. Murphy oversaw a company that achieved revenue growth for 22 consecutive quarters.
“I’m thrilled with this opportunity to lead Gap Inc. given the company’s iconic stature and heritage of innovation and creativity,” said Mr. Murphy. “Alongside some of the most talented people in the apparel industry, we’ll work to reestablish each brand’s leadership position and set the company along a path of sustained earnings performance.”
Discussion Questions: What is your reaction to Gap’s selection of Glenn Murphy as its new chairman and CEO? What will he need to do to get the company and its retail brands turned around?
Gap consumers have grown up. Glenn Murphy will need to re-invent the company’s iconic stature more so than to count on it.
How refreshing to think that someone who has a great retail track record has enough guts to take on this challenge and move from success into the “great unknown,” willing to be judged in public by the group of retail pundits who would love to observe and discuss his failure.
We should should support his bravery and acknowledge the proven skills that he can obviously apply to the business. Perhaps he will be willing to let the current and former shoppers help solve the problem…if he listens he will be able to accomplish what he is being hired to do. He can’t guess the market all alone, but he can guide the “listen and learn and act on” process to meet or exceed the consumer desire for “experience” in both product and shopping that has eroded over time. His success at SDM would indicate he can get it done.
As a marketer, I admire his moxy. As a shopper, I will visit all the banners and let the story unfold in the stores.
Just because you have certain experience on your resume that matches your current challenge doesn’t guarantee success. Macy’s CEO has Neiman-Marcus on his resume, but that hasn’t prevented him from running some of America’s most iconic department stores straight into the ground. I would agree with others that it is leadership qualities and vision that count, not specific channel or category experience.
Having worked with Shoppers Drug Mart during Mr. Murphy’s time, I must say he will be the one to save Gap. His aggressiveness and vision are just what The Gap needs. What Gap needs is someone to clean up the product lines and get the associates selling.
Glenn Murphy urgently needs to assemble the strategy, procedures, and organization to turn the Gap stores back into money machines. Fashion merchandising needs 2 elements to be successful: people with the right eye for what’s next and procedures to quickly test the assumptions before major inappropriate fashion commitments are made. All too often, apparel store success is overly reliant on one (the fashion savants, whose intuition can run hot and cold) or the other (the market research/focus group prisoners, who can’t make decisions quickly and never have the guts to commit 100% when the time is right because they’re still analyzing).
When I was in college–so terribly, terribly long ago–there were two schools of thought: one held that leadership abilities were most important (even if a person’s experience was “in selling sawdust,” you were better off than with a less qualified person with industry experience)…the other held that the first view was nonsense and relevant experience was essential; my own experience has been that neither view qualifies as a “rule,” and that brilliance or idiocy can happen under either scenario: I know nothing of Mr. Murphy (other than what I’ve read here) but I wish him and his fellow Gappers well.
I’m sure he’s a numbers guy but what about instinct? And I mean Fashion instinct. Will he really be able to tell if a blouse will sell because it is a great item or will he only look at numbers.
Does he love The Gap because he’s a loyal customer or because they’re paying him lots of money?
The business is drowning in CEOs that look only at numbers. They’re not home-grown or even industry grown.
Although Mr. Murphy clearly lacks apparel background, I would argue that this is not necessary for the CEO of The Gap. Mr. Murphy’s job is to lead a very large, multi-division, multi-channel retail operation. His apparel skills, talents or product taste are irrelevant, and perhaps, a blessing. Consider the role, and understand that the job description cannot have anything to do with merchandise direction, strategy or execution.
Mr. Murphy will, however, be responsible for insuring that skilled and capable merchants occupy the positions where it’s appropriate to have them, if they don’t already.
Let’s see what Mr. Murphy does. Right now, as a stockholder, I’d like to see a vigorous and clear vision for the company as a whole, with the development (or redevelopment)of a culture and a competitive advantage intended to dominate the market.
This may very well be an excellent choice. At least there is nothing I can see which precludes that possibility.
I guess the proof will be in his execution, but personally I’m a little skeptical.
Generally, I believe that if you have talent, specific past experience is not indicative of future success. In fact sometimes experience can even be a hindrance because you get in a rut and don’t see the situation as an outsider does. My concern here is that what Gap has been missing is the hip factor and I’m not sure that comes into play at all with a drug company.
Let’s see what he does. Perhaps if he has talents in re-building a company image he can be successful at the Gap too.
While Glenn has no direct apparel nor U.S. experience, neither had he any direct Pharmacy background when he assumed the presidency at Shoppers Drug Mart; similarly no “book” background when he joined Chapters. He started at a relatively junior position when he joined Loblaws, and ended up making significant contributions to the business for their Atlantic and then Quebec divisions.
He does know retail. He also has an analytical mind, a keen sense of observation, a winning personality, good financial acumen, and above all else, an ability to implement action.
My sense is that that, eventually, Gap shareholders are going to be “happy campers.”
As an observer of retailing in Canada, I know Mr. Murphy well by reputation. His tenure at both SDM and Chapters were during some of both companies most successful years, and Loblaws is an iconic brand in Canada. While his fashion credentials may be somewhat suspect (although he dresses nicely 🙂 ), his widely acknowledged leadership and strategic skills may be just what the Gap needs. He is smart enough to know what he doesn’t know.
For the short term, Gap (and this time, I’m talking about the actual Gap stores) should eliminate peripheral categories such as intimates, pet, and shoes, and get laser focused on apparel and accessories. In terms of positioning, Gap cannot go back to being all about khakis and t-shirts. With Wal-Mart, Target, Uniqlo, American Apparel and others (including Old Navy!) on one end and Abercrombie, American Eagle, etc. on the other, Gap’s search for a niche will be more difficult than ever. Gap’s brand-less approach is also tricky; J.C. Penney and Kohl’s have been pumping up the proprietary brands in good better and best while Gap was sleeping.
Really, I think they did a good job with spring/summer in terms of bringing in interesting silhouettes that weren’t too forward, offering up a great selection of colors on key items, and improving their bottoms offering and overall quality. Mr. Murphy’s stated goal of differentiating the three Gap brands is a good one.
Stop the cannibalization between Old Navy and Gap and keep Banana as the upscale, sophisticated alternative to J. Crew. No distracting spin-off concepts allowed for at least two years and finally, why not make it a goal to localize assortments as much as possible? The behemoths have had trouble executing this and it could return Gap to the days of “my Gap store.”
Gap has tried a lot of things over the past few years to turn itself around. They even attempted to replicate Starbucks’ “third place” positioning by creating lounge type areas in their stores. None of their initiatives have helped slow the decline of sales.
While I don’t know Murphy, his varied background might be just what the clothing retailer needs. Shopping, especially for clothes, has to have some theater involved if a chain is going to be successful. Take a look at what Ambercrombie & Fitch has done as a great example of making shopping an event. Murphy will need to do the same to turn sales around, and make the Gap a meaningful retailer again.
It’s still too early to know whether or not Glenn Murphy, Gap’s (Ticker: GPS) latest “boy wonder,” will pull the proverbial rabbit out of the hat BUT what is clear is that he will need to find–and quickly, given their 12-18 month product lead times-a “visionary” partner if he’s going to have a prayer in accomplishing this monumental task.
The critical issue that GPS must address (and hasn’t since at least 2003) is defining its raison d’etre (translation: why does it deserve to be in business):
– who are its core customers?
– what unmet needs do they have? and
– what merchandise can GPS uniquely offer them that others cannot?
This core issue actually doesn’t require financial engineering expertise (Pressler and Pollitt did a fine job of addressing this issue); I would assume a “turnaround artist” such as Murphy possesses these skills in spades given his resume.
Instead, it requires a retail visionary (a la Rose Marie Bravo recently of Burberry, Lew Frankfort of Coach, and yes, Mickey Drexler of JCrew). Visionaries are business builders who understand the target customer, what they want, what’s lacking in the marketplace, and how to consistently fill this unmet need in a way that’s highly differentiated and defendable over time. It sounds so simple, but it’s not. It requires a mix of art, science and experience, which is rare to find in a one person these days.