Gap Inc. has been struggling to effect a turnaround after a long period of turmoil but to no avail. The company announced that CEO Art Peck, who took on the role in 2015, will be stepping down.
The news caused the company’s stock to plummet 7 per cent to US $ 16.75. The son of founders Donald and Doris Fisher, Robert J. Fisher who serves as Gap’s non-executive chairman of board will be taking over the position as interim CEO and President.
“As the board evaluates potential successors, our focus will be on strong leadership candidates with operational excellence to drive greater efficiency, speed and profitability,” he said in a statement.
The San-Francisco based company has lowered their expected earnings for the year after a rough quarter for its major brands Gap, Banana Republic and Old Navy.
The company has also come out with the decision of splitting up the two publicly trading entities. One arm will be for Old Navy while the other will host brands like Gap, Banana Republic, Athleta and others owned by the retailer. Gap Inc. said on Thursday that global sales at its stores open at least a year fell 4 per cent.
By brand, Gap’s same-store sales fell 7 per cent, while the figure was down 3 per cent at Banana Republic.
At Old Navy, which had been the company’s juggernaut, same-store sales fell by 4 per cent.