The Chief Executive of apparel company Gap Inc. will step down immediately, according to a report in The Wall Street Journal.
Art Peck is leaving the company and will be temporarily replaced by Robert Fisher, who is the son of the couple that founded the company. Fisher was previously named interim CEO in 2007 when former Walt Disney executive Paul Pressler was pushed out.
The company has struggled with revenue over the last few years and lately has been battling weak sales and lowered profit goals. Shares fell 7 percent on the news.
Gap is in the process of separating its Old Navy chain, with the purpose of having two different companies. After the split, Peck was expected to remain the CEO of Gap, Banana Republic and Athleta.
Peck started at Gap almost 15 years ago and was named CEO in 2015. He will give up his seat on the board.
Gap, once a juggernaut in the ’90s, has lost value as consumers switch to brands like Zara and H&M. Old Navy sales have now eclipsed Gap.
However, the company is seeing its value diminish throughout all of its brands. Global comparable sales were down at Old Navy by 4 percent, and 3 percent at Banana Republic. Gap sales dropped 7 percent.
The company previously said that adjusted earnings per share would equal about $2.05 to $2.15, but those were adjusted to $1.70 to $1.75.
Finance chief Teri List-Stoll said that the troubles were a mixture of company missteps and a difficult market, and that there were specific challenges moving forward.
“There is more work to do,” she said. “We know these brands are capable of delivering.”
During Peck’s tenure, profit was down 20 percent and sales remained stagnant. Net income equaled $1 billion for the year, and it was $1.26 billion in 2015. During the same period sales went up less than 1 percent, to $16.58 billion.