Current Gap CEO To Step Down In February 2015
By Brianna Ahearn, contributing writer
According to The Philadelphia Inquirer and The Wall Street Journal, clothing retailer Gap announced on October 8 that its current CEO, Glenn Murphy would be stepping down from the company. Taking Murphy's place will be Gap's current chairman and digital leader, Art Peck, who's been with the company since 2007. Murphy will be retiring and hasn't announced any further plans. The change in leadership comes on the heels of Gap reporting low September sales, that ended with a 3% drop.
A press release published by Gap on October 8 spoke about Murphy's role at the company. “Under Murphy’s stewardship, the company acquired new brands and globalized its business by expanding store locations from about 10 to 50 countries, including China,” the release says. After joining Gap, Murphy formulated and executed a plan with the board of directors to help the retailer improve how they get their fashions to consumers and elevate the brand in consumer opinion. He worked to get Gap turned around and offering trendy fashion, expanding internationally. The problem, however, was that trends like colored trends were losing steam and Gap has to make up the difference.
In the statement, Murphy speaks about Gap's position in the industry and the retailer's current strengths. “Today, Gap Inc. is a formidable global fashion retailer with a strong foundation in place for long-term growth, therefore making this an appropriate inflection point for me to pass the baton to a leader who will take our portfolio of brands to even greater heights.” Murphy seems confident about the direction of the company in Peck's hands. “I think this is a good day at Gap. The best of this business is ahead of it. This is a future CEO who knows our culture,” he says.
Peck's strategy, according to his statements to news outlets is to look toward the company's digital future and continuing to expand their global growth. One of his plans already in operation was Gap testing online in-store reservation for companies at select stores. Peck will join Gap's board of directors, and Bobby Martin, lead independent director of the board, spoke highly of him. “We are pleased to have an internal leader with Art's proven track record and management capabilities to chart the path for the company to further compete, win and grow,” he says. “Art has created substantial value for the company over the past decade, and the Board is confident he will further increase long-term returns for our shareholders.
As president of Gap North America, Peck cleaned out extra inventory, plus managed Gap Outlet and Banana Republic. He also helped the company purchase athletic clothing retailer Athleta, fashion company Intermix, and implements omni-channel and digital strategies for Gap. When Peck steps into the position in February 2015, Gap will be looking back at their 2014 holiday sales, and time will tell how the retailer performs this year. The challenge facing Peck now is to rebound from the sales slump, and find new ways to boost revenue. The total revenue rose 1% to $1.48 billion but sales at stores open longer than a year didn't change. All eyes will look to Peck to improve Gap's profit margins as the retailer heads into a new era of leadership.