Gap Inc.'s search for a new chief executive has been long and difficult. Nevertheless, sources in the past week have indicated that the Gap search goes outside the U.S. and into the mass arena — and is likely down to a couple of candidates.
Although he seems like a long shot, one candidate is believed to be Glenn Murphy, former chairman and chief executive of Shoppers Drug Mart Inc., Canada's leading drugstore retailer. The 45-year-old Murphy is not a fashion merchant, but he did a stellar job turning around the drugstore chain, elevating its offerings with upscale makeup and cosmetics, among other products, and which at around $8 billion in sales is of a scale that would give the $16 billion Gap some comfort. He's said to be aligned with Kohlberg Kravis Roberts & Co., which owned Shoppers Drug Mart and took it public while Murphy steered the ship.
"He's highly regarded, came out of Loblaws, and has a track record for creating value," said a source in Canada. "He completely understood the makeup and cosmetics categories, which are higher-margin businesses. He knows those categories brilliantly and was spectacular working with vendors." He also led the development of a lot of private label, enlarged the footprint of the drug stores, and instituted an advanced customer relations management system. "He really optimized the relationship with the customer."
Gap requires someone with an almost impossible-to-find blend of turnaround skills, vision and fashion savvy. The handful of fashion retailers in the U.S. that could fit the bill are said to be either generously compensated and content with their current employers, impeded by noncompete clauses, near retirement age or just not willing to take on the monumental task of reviving Gap Inc. and its Gap and Old Navy brands. The Banana Republic division is the least troubled.
"Gap needs to deflate the bubble and inflate with a new paradigm," said the source.
Murphy joined Shoppers Drug Mart in 2001 and left the company earlier this year.
Prior to that, Murphy had a 14-year career with Loblaw Companies Ltd., which operates the Loblaws supermarkets in Canada. He held numerous senior management roles of increasing responsibility.In 1999, Loblaw acquired the Provigo grocery chain and Murphy oversaw the integration of the two businesses.
He was born in Montreal and is bilingual. He could not be reached for comment.
Some analysts mention the possibility Gap might stick with Robert J. Fisher, who is acting president and acting ceo and son of Gap founder Donald Fisher. However, when former Gap president and ceo Paul Pressler resigned in January, and Robert Fisher stepped up, Fisher said it was not his intention to stay permanently in the role.
Last January, Gap said the search committee's preference is to focus on a ceo who has "deep retailing and merchandising experience, ideally in apparel; understands the creative process, and can effectively execute strategies in large, complex environments while maintaining strong financial discipline."
Egon Zehnder, an international search firm, is working with Gap to find the ceo.
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