NEW YORK — Gap Inc.’s search for a new chief executive is gathering speed — but it’s tough.
Finding a successor to Millard "Mickey" Drexler has proven to be a long and challenging search, considering the magnitude of the assignment and the shoes to fill. But sources said Wednesday the search is accelerating, with mounting speculation on new candidates from inside and outside the world of fashion retailing, and search officials are pressing to get the job done soon, before the holiday season when retailers are busiest and most difficult to lasso.
Andrea Jung, chairman and ceo of Avon, is reportedly being pursued, but may have already said no. Also this week, there were rumors about John J. Eyler Jr., president and ceo of Toys ‘R’ Us since January 2000, and chairman since June 2001. However, he denied being approached by Gap or its search representatives and said he wasn’t a candidate. "There isn’t even any smoke here," he said in a telephone interview Wednesday.
Eyler is an operations, number-crunching ceo, more so than a merchant. Prior to joining Toys ‘R’ Us, he was chairman and ceo of FAO Schwarz, which he joined in 1992 from Hartmarx, where he was ceo of its retail subsidiary. Earlier, Eyler was chairman and ceo of the former MainStreet division of Federated Department Stores. He began his retail career at May Department Stores, rising to president and ceo of May D&F in Denver at age 32.
Jung has broad marketing, product and leadership skills, having been a top merchant at Neiman Marcus and I. Magnin, and at Avon, she has an instant succession scenario, with Susan Kropf, president, right behind her to take over the reigns. Jung has a handle on consumers, a track record of product introductions, good taste, a sharp financial mind, and is operations-driven, and she went to Princeton with Robert Fisher, who once ran the Gap brand, remains on the Gap board and is the son of Gap founder and chairman Donald Fisher. Jung couldn’t be reached for comment Wednesday.
"Either would be an excellent choice," said Elaine Hughes, principal of E.A. Hughes & Co. executive search. "But there aren’t many people who could do the Gap job because not many have the breadth of experience that’s required. To me, it is the responsibility of the board to look at the core competencies of the division chiefs and then determine the core competencies they want in a ceo to support the division chiefs. It’s apparent the Gap needs a strategic operating executive to guide the future of these brands, and it should be the responsibility of the heads of those brands to drive the individual vision of those brands. Both John and Andrea have succeeded in companies that had a long, ingrained history, but needed redirection and dusting off, like the Gap needs."Some obvious choices contacted, but reportedly not willing to jump ship, include Roger Farah of Polo/Ralph Lauren, American Eagle Outfitter’s Roger Markfield, Paul Charron of Liz Claiborne, and Michael Weiss of Express. Others likely to have been contacted are Michael Jeffries, chairman of Abercrombie & Fitch; Grace Nichols of Victoria’s Secret Stores; Rose Marie Bravo of Burberry, who is not available because of the firm’s recent IPO and her stake in the business; and Rob Bernard, who is available, having departed as ceo of the Limited Stores division after differences with chairman Leslie Wexner over where to take Limited. Bernard wanted to go for an older audience; Wexner wanted younger.
Other speculation focuses on Jeanne Jackson, who successfully ran and branded Banana Republic, but ran into bad chemistry with Drexler and left. She has been consulting for J. Crew, but with Drexler leaving, she could have an opening. Ken Pilot, formerly president of Gap International, joined Crew several months ago as ceo.
Already, officials involved in the search have indicated Gap is leaning towards a marketer rather than a merchant. The retailer wants a ceo to revitalize and differentiate Gap’s three brands: Gap, Old Navy and Banana Republic. That’s fueled speculation about such executives as Jung and Charron, as well as Joe Galli, of Newell/Rubbermaid, and a former Amazon president, considered a great marketer and team builder, known for promoting young management on board. Some believe Meg Whitman, ceo of Ebay, who developed Ebay into a brand and sustained it through the dot-bomb scenario, could emerge as a contender.
Hal Reiter, ceo of Herbert Mines Associates, the search firm working for Gap Inc., declined to comment on thesearch. Heidrick & Struggles is also working on the search, to cast a wider net.
Meanwhile, some sources believe the best person to replace Mickey Drexler, who also serves as president of the Gap Inc., remains Mickey Drexler. In other words, he’s still the best choice for the job. And lately, he’s looking a little better, with the potential for improved sales numbers as a result of Gap’s return to clean basics and denims with better quality. But Drexler is definitely on his way out following his decision in May to retire as soon as a successor to him could be found.Gap also recently installed new division chiefs for the Gap and Banana Republic divisions, both of whom are insiders and merchants who understand product development. Gary Muto was tapped as president of Gap U.S., while Maureen Chiquet, executive vice president of merchandising for Old Navy, succeeded Muto as president of Banana. With Gap veterans running divisions, the group probably would be more comfortable recruiting a ceo with operational, branding and perhaps restructuring skills to streamline its bloated store base, clean up its balance sheet and revitalize its brands. It would be a different skill set that supports the product skills of divisional lieutenants.
Walter Loeb of Loeb Associates thought those appointments "make it more difficult to attract a ceo who is now saddled with people he may not like. It shows the influence of Don Fisher in the decision-making process, which could discourage people from taking the ceo job." Loeb sees Gap being best off with a merchant prince who would form the team he wants. "Replacing a dynamic merchant like Mickey with a non-merchant administrator would be a mistake. Unless you have a product that the consumer wants, you can’t market the brand properly. The stores became almost too department-store-like rather than being a focused sportswear store. They may be looking better this season, but the impression of the past lingers."
Similarly, Robert Kerson, president of the global retail practice of Korn/Ferry International, said, "I don’t see anybody managing this from 40,000 feet. I think there is a strong need for someone with product skills to get the business fixed, not for a change in management style," from Drexler’s very hands-on approach.
"While the Gap is very big and complex, and its problems are big and complex, it shouldn’t get away from what made it great — attention to detail, merchandising design and product development," Kerson said. "No matter who gets the job, no matter what the skill set, the next ceo needs to have phenomenal leadership skills. Getting the support of the buying team and the board is going to be a real challenge. Having looked at similar kinds of business recently for ceos at J. Crew and Eddie Bauer, I can say that the market for talent is very narrow. There is a very short list of people. It’s highly likely that Gap goes outside the industry."Said one executive who was contacted but is not in the running anymore, "This is a very challenging search. The Gap is considering a lot of options, and not looking for a merchant prince. They’re looking for more of a process person who understands the supply chain, logistics, real estate, someone maybe with a Proctor & Gamble mentality, knows about branding. A Pepsi-Coke person, but with financial skills."
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