Gap Brand announced that its CEO Jeff Kirwan was leaving the company, just as the retailer gets ready to reveal its fourth-quarter results.
“While I am pleased with our progress in brand health and product quality, we have not achieved the operational excellence and accelerated profit growth that we know is possible at Gap brand,” Gap Inc.’s Chief Executive Officer Art Peck said in a statement, according to news from Reuters.
The company has struggled in recent years with declining sales and has been working to boost revenue by recharging underperforming lines, creating online offerings and launching new styles at a faster pace in its stores.
Gap Inc. did succeed in raising its 2017 earnings and same-store sales forecasts in November, but those numbers came mostly from Old Navy.
Same-store sales at Gap fell more than anticipated for most of 2016. While comparable sales rose 1 percent in the third quarter of 2017, analysts expected those sales would fall by 0.17 percent in the holiday quarter.
“While we remain confident in Old Navy’s ability to post solid results against difficult comparisons, we have less confidence in an operational turn at Gap banner in the short to medium term,” said KeyBanc Capital Markets analyst Edward Yruma, who also believes many of the brand’s issues might be “difficult to fix.”
Kirwan had been in charge of the Gap brand since December 2014. Brent Hyder, Gap Inc.’s head of Global Talent and Sustainability, will oversee the brand until a permanent replacement is found.
“I think it’s just frustrating because in their last earnings report there was a lot of optimism that Gap was making a comeback, and at this point it indicates it really has not,” said Gabriella Santaniello, CEO of retail consultancy firm A-Line Partners. “Ultimately, this is the right decision.”