NEW YORK — Jenny Ming, president of Gap Inc.’s Old Navy division since 1998, is jumping ship.
Her departure raised concerns about the fall season at San Francisco-based Old Navy, where many merchandise changes have been implemented and a new store design is in the works. However, analysts given previews of the collection have generally cited improvements in the product.
People familiar with the situation said Ming was pursuing options, such as leading another specialty chain. They downplayed speculation that she might be a candidate for a top job at San Francisco-based Levi Strauss & Co. or Liz Claiborne, based here, which are seeking new chief executive officers.
Ming, a 19-year veteran of Gap, was a member of the original executive team that conceived Old Navy in 1994, launching it along with Millard Drexler, the former ceo of Gap Inc. who is now ceo of J. Crew Group.
“She’s a straight shooter, not a razzle-dazzle kind of executive,” said a former colleague, who asked not to be identified. “She’s low-key, effective, well respected and excellent at sourcing and production. She knows how to move a lot of units. She was the last holdout from the Drexler team.”
Until recently, Ming, 51, enjoyed huge success at Old Navy, making it into a national retail force with more than $6 billion in volume and in excess of 900 stores last year. Along the way, she became one of the richest and most influential women in retailing. Her severance agreement, which runs through April 15, 2008, entitles Ming to $1.5 million unless she takes another job before then. She is expected to remain at Old Navy until mid-October.
During the last two years, same-store sales have been sinking and Old Navy has lost market share to competitors. Comps were down 11 percent in the first quarter of this year after a 6 percent drop last year. They were flat in 2004.
“Old Navy has always been known as a specialty retailer with a value proposition, but we most recently skewed too far toward value, which enabled some competitors to compete more effectively against us,” said a Gap Inc. spokesman. “Jenny and her team have worked very hard to reclaim that specialty retail value authority. We feel very confident on the positioning and we’re clear on the strategy.”
For fall, Old Navy is taking a different tack by adding some higher price points, such as leather jackets, more sophisticated and darker denim washes, silk items and embellishments, and reducing clutter and trying to make the store easier to shop. Inventory is being trimmed and there will be smaller, more frequent product flows into the stores, rather than huge and less-frequent shipments. The first fall goods will hit stores on July 27 and they will be fully merchandised with fall product around mid-August.
With all the changes and expectations for improvements this fall, Gap Inc. projects low-single-digit gains.
Retail experts said Ming’s departure seemed sudden.
“I think it’s odd timing because it appears as though the company could really be in a turnaround mode,” said Jennifer Black, president of Jennifer Black & Associates.
Mark Montagna, analyst at CL King & Associates, offered a possible explanation: “Old Navy has been struggling for over two years now. At some point, it’s hard to continue to work in that type of environment. When you are dealing with negatives all of the time, missing plan for two years, that’s a lot of stress, especially after so many [prior] years of success. I don’t see how this is anything but a negative. Here is the most important season for Paul Pressler [Gap Inc. ceo and president] and one of his prime-time players is leaving.”
Commenting on Gap’s expectations for low-single digits, Montagna said: “We don’t think that’s high enough to signal that the merchandise resonates with the customer. We think midsingle comps would indicate they are back on track.”
Another source said, “Jenny just wanted out.”
In announcing her resignation Tuesday, Ming said she would stay through some of the fall season, giving Gap time to find a successor. The company said it would consider internal and external candidates.
“My 19 years with Gap Inc. have been exciting and rewarding, particularly the past 12 years spent leading Old Navy,” Ming said in a statement. “Now the time is right for me personally, and for the brand, to make a change. I’m confident in the team’s ability to continue executing our strategies, and [be] committed to ensuring a seamless transition.” She was not available for further comment.
“I want to thank Jenny for her nearly two decades of tremendous leadership and dedication to Gap Inc.,” Pressler said in a statement. “She helped lead the development of Old Navy from its conception, forever changing the apparel landscape by offering fashion at a great value in a uniquely fun store environment. And under Jenny’s leadership, the team built the strong, iconic brand we have today.”
Coming from Mervyns, Ming joined the Gap division of Gap Inc. in 1986, taking various merchandising roles. After helping launch Old Navy, she became its president in 1998. She’s been listed in Fortune magazine as among the 50 most influential women in business.
Gap Inc. also said Ming played a key role in developing the company’s fourth brand, Forth & Towne, which was launched about a year ago and continues to tweak its presentation.
Gap has gone outside the retail/fashion world to recruit executives, including hiring several executives from Disney, where Pressler once worked. However, Pressler said of a new Old Navy president: “We’re looking for an exceptional leader with strong apparel retail experience, who has a track record inspiring creative teams.” He added, “I remain confident in the changes we’re making in all of our brands, including Old Navy, to drive our turnaround.”