Old Navy CEO Gap will step down because of a tightening of sales guidelines

An employee gives a customer a shopping bag to the San Francisco Old Navy Inc. in a store.

David Paul Morris | Bloomberg | Getty Images

Gap Inc. on Thursday announced that Nancy Green, the director general of its Old Navy division, will step down this week.

Gape CEO Sonia Syngal will work closely with the Old Navy team while looking for Green’s successor abroad, the company said.

In response to what it called “execution challenges” within the Old Navy business, Gap also cut its forecast for net sales in the first quarter of 2022. Now, it predicts a small to moderate decline among teens compared to the previous year, compared to the previous year. an earlier forecast that required single-digit mid-high declines.

The sudden news of Green’s departure comes as Gap struggles to cope with ongoing logistical disruptions and inflation that threatens to reduce consumer spending.

A supply chain has been very tough in its Old Navy division, targeting a lower-income consumer, the company said in early March when it reported quarterly results. Delayed shipping means that the retailer does not have enough merchandise available to meet the demand of buyers in some cases.

In fiscal terms for the fourth quarter, sales at the same store in the Old Navy were flat compared to 2019 levels.

Gap said on Thursday it had also taken a “more aggressive approach” to balancing its range of goods in the Old Navy, which has led to higher levels of promotion. He didn’t clarify the issue further, but it is likely that more markdown will weigh on retailer profits.

Gap said it will provide an updated forecast for 2022 when it announces its quarterly results on May 26th.

“As we seek to harness the potential of the Old Navy, especially in the face of the macroeconomic dynamics facing our industry, we believe now is the right time to bring in a new leader,” Syngal said of Green’s departure.

He added that the company is looking for someone with “operational rigor and a creative approach” to implement the retail plan.

Gap shares fell nearly 11% in extended news trading. Shares fell about 19% to date at the close on Thursday.

Find the full Gap press release here.

Old Navy CEO Gap will step down because of a tightening of sales guidelines

Source link Old Navy CEO Gap will step down because of a tightening of sales guidelines

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