By  on April 20, 2007

Gap Inc. has brought back a company veteran to boost its turnaround effort.

The $16 billion retailer announced Thursday that Gary Muto, who spent 19 years at Gap, has returned to the company as president of Gap Adult and GapBody, the second-ranked slot at the Gap brand.

Muto left the company in February, when Gap said that its Forth & Towne concept, launched in fall 2005 with Muto at the helm, would be phased out after failing to meet expectations.

Now Muto, 47, will be responsible for all aspects of the Gap Adult and GapBody businesses in North America. He succeeds Denise Johnston who left the San Francisco-based company in January. He will report to Marka Hansen, president, Gap North America.

"It's a good move,'' said Mark Montagna, senior analyst at CL King & Associates. "He knows where Gap was and he should be the type of person who can reinvigorate Gap's future. He's spent a lot of time with the older customer at Forth & Towne and much of what he learned there could be applicable to the future direction of Gap."

Tom Wyatt, president of GapBody will become the president of Gap Inc. Outlet, focusing on Gap Outlet and Banana Republic Factory Stores. Wyatt, 51, had assumed responsibility for the outlet division in March.

"Gary is a proven merchant and has held a variety of leadership roles during his 19 years with the company," Robert J. Fisher, Gap Inc. interim chief executive officer and chairman, said in a statement. "Marka and Gary are a dynamic team with a strong history with Gap brand. They'll help us make the changes necessary for the long term."

Muto began his career with Gap in 1988 as a merchandise manager for the Gap brand. He held merchandising positions of increasing responsibility at Gap and Banana Republic and was named president of Banana Republic in 2001. A year later, he became president of Gap brand and later was asked to launch Forth & Towne concept, which catered to women 35 and older. It will cease operations in June.

Hansen said in a recent conference call that Gap would skew older. It had been targeting 18- to 35-year-olds."I care deeply about this company and it's great to be back at Gap brand," Muto said in a statement. "I look forward to working with Marka and the team to return the brand to its leadership position."

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