Gap Inc. has relieved Old Navy president and chief executive officer Nancy Green of her command.
Green’s departure, while sudden, is not surprising considering Old Navy, the biggest division of Gap Inc., has been struggling in recent seasons.
A search for a candidate from outside the corporation is being sought, as Green will be exiting Old Navy this week.
With the business hitting turbulent waters, and getting increasingly promotional, Gap Inc. has revised its first-quarter sales guidance downward to about low- to midteens year-over-year declines from its prior guidance of mid- to high-single-digit year-over-year declines.
Following the news break Thursday, Gap Inc. stock plunged more than 12 percent, or $1.75, to $12.54 in after-hours trading on the NYSE, following a 0.6 percent decline in the regular session, when it closed at $14.29.
“We believe in the power and potential of the Old Navy brand and the contribution it will have as we execute our Power Plan strategy and drive value creation at Gap Inc.,” said Gap Inc. CEO Sonia Syngal in a statement.
“As we look to seize Old Navy’s potential, particularly amidst the macro-economic dynamics facing our industry, we believe now is the right time to bring in a new leader with the operational rigor and creative vision to execute on the brand’s unique value proposition. I want to thank Nancy Green for her decades of leadership and passion for our brands and customers, as well as the communities we serve.”
Syngal said she will work closely with the Old Navy team until a successor for Green is found.
Old Navy’s fourth-quarter sales were muted partly due to supply chain impacts, but were up 2 percent versus 2019 with comparable sales flat versus 2019. For the year, the brand crossed $9 billion in net sales and rose 14 percent compared to 2019 with comparable sales up 12 percent versus 2019.
Gap Inc. has also been impacted by higher freight costs and ongoing declines at the Gap and Banana Republic brands, and in the fourth quarter, the corporation incurred a loss of $16 million but took a big swing into profitability for the year overall.
However, Gap’s Athleta active brand continues to perform well and grow.
“In light of the macro-economic dynamics as well as the execution challenges at the Old Navy brand, the company is updating its first-quarter fiscal 2022 net sales growth guidance to approximately low- to midteens year-over-year declines from its prior guidance of mid- to high-single-digit year-over-year declines,” the company said. “The company has also taken a more aggressive approach to assortment balancing resulting in increased promotional levels primarily at Old Navy. The company will be providing updated fiscal 2022 guidance when it reports first-quarter fiscal 2022 results on Thursday, May 26.”