By  on February 20, 2008

Dawn Robertson, president of Gap Inc.'s struggling Old Navy brand, has left after 16 months on the job.

The $6.8 billion division had disappointing fall and holiday seasons, and there have been concerns about the new directions the specialty chain is taking and whether it has been making progress fast enough.

Tom Wyatt, president of Gap Inc.'s Outlet division, will become acting president of Old Navy while a search is conducted for a permanent replacement. A search firm will be hired, though there was speculation that Wyatt might ultimately become president.

"I appreciate Dawn's hard work over the past 16 months and wish her all the best," said Glenn Murphy, chairman and chief executive officer of Gap Inc. "We're fortunate to have someone of Tom Wyatt's caliber and experience...to guide Old Navy during this transition."

Murphy, who became ceo in August, was not available for further comment.

"Their strategy has been so off," said a source close to the business. "If you go in the store now, they are trying be like Zara, H&M and Topshop. It's suicidal. It's not who they are and not how the business was built."

When Robertson joined Old Navy, questions were raised about whether she was the right person for the turnaround assignment, considering she had no specialty store experience. She was a former Federated Department Store executive who had been working as managing director of the Myer department store chain in Australia when she was recruited to Old Navy.

Under her direction, Old Navy's strategy was to shed the family image, target the twentysomething crowd and present major themes on a monthly basis. The strategy, launched last month, centered on faster deliveries and wardrobe-building collections that change monthly. The product development cycle time has been halved in an attempt to be more trend-right and to speed up deliveries so those monthly collections are ready to go.

In addition, a new logo was developed and the division has been working to renovate stores.

Designer and reality TV personality Todd Oldham became creative director in September to develop the merchandise direction and creative vision. The appointment raised possibilities, such as Oldham creating a signature line to sell at Old Navy, or designing home goods for the retailer, which doesn't sell the category, or even becoming a celebrity spokesman. Oldham's influence on the collections will begin to be noticed in June and July, and fully felt by the August-September period, officials said.The chain continues to open more stores than it shutters, and by the end of this year will operate about 1,100 units compared with the current 1,058.

"At an analyst meeting a few months ago, Glenn came across as very decisive," said Mark Montagna, vice president of specialty retail at C.L. King & Associates.

Among his key executive changes, Murphy promoted Sabrina Simmons, a seven-year Gap veteran, to executive vice president and chief financial officer from vice president and treasurer. She succeeded Byron Pollitt, who joined Visa.

Murphy also promoted Jack Calhoun to president of Banana Republic. Calhoun was acting president of the Gap Inc. division. Lauri Shanahan, chief legal and administrative officer, will leave at the end of March. The position will not be filled.

Montagna suggested that Wyatt could ultimately be the permanent leader of Old Navy.

Montagna credited Robertson with some improvements at Old Navy, including charting a new course and reduced markdowns. However, "the merchandise has not progressed as far as the Gap division merchandise has progressed, which is why you have a higher level of markdown activity," Montagna said. "But the markdown activity is less today than when Dawn first took over. Perhaps Glenn was not confident she could take it to the level he expected. Tom Wyatt could be that person."

Wyatt joined Gap Inc. in March 2006 as president of GapBody. A year later, he became president of the Outlet division. A 30-year retail and apparel veteran, Wyatt also served as president and ceo of Cutter & Buck Inc., president of Warnaco Intimate Apparel, ceo of Parisian, executive vice president of strategic planning and e-business strategies for Saks Inc. and president of Vanity Fair Intimates Coalition.

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