Gap’s namesake brand picks a new CEO as it tries for a comeback
Gap Inc. has named Neil Fiske as president and chief executive of its namesake brand as the clothing retailer looks for a comeback amid declining mall traffic, operational missteps and disappointing growth.
The search for a new top executive for the brand began in February, when the San Francisco company announced Jeff Kirwan would leave the post after just over three years. The Gap brand has been the company’s most troubled division, with a slew of management changes and shifts in strategy. The parent company has been working to fix issues at the brand, which have included late deliveries that resulted in excess inventory that it had to discount in order to sell.
“They’ve turned the dial; now if they can continue to do that is a separate question,” said Poonam Goyal, an analyst at Bloomberg Intelligence. Wall Street is “still a little pessimistic about if they can do it. While it’s an iconic brand, there’s just so much competition.”
The market reaction was muted, with shares initially rising 0.4% in after-hours trading before returning to where they’d closed the day’s session. Shares are down 5.4% this year.
The company’s shares fell the most in 18 months in May after it reported that first-quarter sales at Gap-brand stores slipped more than analysts had anticipated. The results prompted Art Peck, CEO of the parent company, to say he “was not pleased with the performance.” The parent company has become increasingly dependent on its Old Navy and Athleta chains, and it hasn’t been able to translate growth there into success at its eponymous brand.
“Neil brings significant retail and apparel experience to Gap Inc. and a track record of transforming and repositioning brands,” said Peck.
Fiske most recently served as CEO at surfwear company Billabong International. Before that, he held CEO roles at outdoor outfitter Eddie Bauer and Bath and Body Works, Gap said. Fiske will begin his new post June 20 and will report to Peck.
“I think they’ve hired a good candidate to lead the turnaround,” Goyal said of Fiske. “He seems promising, and the Gap brand needs someone that sort of understands what it takes to turn around a brand. It really needed leadership that can envision the longer term of a brand and create better brand perception.”
Townsend and Patton write for Bloomberg.