Gap is keeping communications with investors relatively vague.
In a brief annual meeting with shareholders, which it webcast in a rare move, chairman Bobby Martin called the coronavirus pandemic and resulting closure of most nonessential retail business for the last two months “one of the worst crises this industry has ever seen.” Yet the company offered little insight into exactly how it’s been impacted or how it plans to cope in the months to come.
“While the effects of the pandemic will continue for some time…the company is taking the right steps to emerge for the future,” was all Martin allowed. He also praised new chief executive officer Sonia Syngal, who took up the role from Art Peck about a week after most stores in the U.S. were ordered closed to limit spread of the virus, calling her leadership of the company “admirable and confident.”
As for Syngal, she kept her comments upbeat but also vague, although she did note that 90 percent of Gap’s store fleet across its seven brands remain closed. She made no mention of plans revealed about two weeks ago to have 800 stores reopened this month. Nor did she address other attempts to cut costs, like its ongoing decision to not pay rent and the potential legal repercussions of that. The company’s stock held relatively steady in afternoon trading at $7.78 a share, up from a 52-week low of $5.26 hit in April.
“I’m certain it’s not lost on anyone how much has changed since our last annual meeting,” Syngal said.
She went on to note that while nearly all stores remain closed and Gap has permanently reduced headcount in corporate roles globally while furloughing nearly all retail employees, “we’ve moved faster and more united as an organization than we have in years.”
Syngal added that the pandemic is also forcing Gap to attempt to “embrace the opportunity from this crisis” by “accelerating much needed change, including the rationalization of its store fleet and the scaling of e-commerce. As retail experts have already predicted, Gap is among the many retailers likely to not reopen hundreds of stores that are currently closed as leases expire.
“We know the retail landscape will look different,” Syngal said during the investor meeting.
As for those stores that do reopen, Syngal said Gap brands, which include Old Navy, Banana Republic and Janie and Jack, are “ready to help shape the gold standard for opening safely,” although she shared no specifics on how the company intends to do that.
Syngal said she visited over Mother’s Day weekend retail locations in Texas that were able to reopen as that state decided to unlock its economy much quicker than others. She called her visits “energizing.”
“Gap has weathered many storms over 50 years,” Syngal said, “And we’re among the companies positioned to emerge from this and thrive.”
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