Gap Inc.’s CEO steps down. What comes next?
Art Peck is out as president and CEO of Gap Inc. The company’s board made the announcement after its three major chains — Banana Republic, Gap and Old Navy — all posted declines in same-store sales during the third quarter. It also lowered its forecast for the year after citing slower foot traffic and “product and operating challenges across key brands.”
Hopes ran high when Mr. Peck took over as CEO of the company from Glen Murphy in 2015. Under Mr. Murphy, Gap enjoyed a six-year compounded annual growth rate on earnings per share of 17 percent, despite the challenges associated with operating the business during and after the Great Recession. Mr. Peck seemed the ideal pick to move into the top spot after serving as president of Gap’s growth, innovation and digital division.
Under Mr. Peck, Gap has invested heavily in technology to advance its digital operations and omnichannel capabilities. The company has also closed hundreds of underperforming stores, rolled out its Bright Rewards program on a national basis and announced plans to spin off Old Navy some time in 2020.
“Under Art’s tenure as CEO, we have made progress investing in capabilities that bode well for the future, such as expanding the omni-channel customer experience and building our digital capabilities,” said Robert Fisher, Gap’s non-executive chairman of the board, who will serve as interim president and CEO of the company while it engages in a search for a new chief executive.
Mr. Fisher said the CEO search will focus “on strong leadership candidates with operational excellence to drive greater efficiency, speed and profitability.”
- Gap Inc. Announces Art Peck to Step Down as Chief Executive Officer – Gap Inc.
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DISCUSSION QUESTIONS: Where do you see the greatest challenges facing Gap in the current environment? What type of leader do you think is needed to put Gap Inc. back on the right footing?