Gap shares are getting smoked. RL, -0.59% Chief Executive Art Peck replaced Glenn Murphy in February, and Jeff Kirwan replaced Stephen Sunnucks as global Gap brand president in December 2014.
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There have been three other executive changes in the past 12 months for Gap Inc. Our thesis was based on a combination of strength at Old Navy and under-appreciated margin catalysts to offset weakness at Gap and Banana Republic in 2H, and for Gap to begin to turn in spring.
Webb’s departure suggests that Banana Republic’s sales haven’t improved as much as anticipated. At the time, Gap disclosed it had taken a minority stake in Webb’s contemporary design business.
Adding to the bad news, Banana Republic’s creative director Marissa Webb will transition to a creative adviser role. “We believe that earnings visibility for the year has declined, with increased uncertainty regarding Old Navy’s holiday/fourth-quarter performance as it laps hard year-ago compares”, she noted.
Webb did build up the design team at Banana, and tried to push the brand forward in terms of providing styles that women could wear for their daytime activities and into the evening, with more details.
Webb was initially brought on with the company in April of 2014 to help reinvigorate the brand. At a new flagship in Manhattan last March, for example, there was a sprinkling of items from artisans that manufacture in America. Inc.-owned brand, has left her post as the label’s designer.
While the change with Webb stemmed from an inability to create collections that resonated enough with consumers, a source close to the situation denied there were any internal tensions between Webb and Banana management.
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The company won’t be filling the creative director position at this time. But the company remains positive, with Marissa excited about her new job. At Old Navy, the measure rose 4 percent. Jill Stanton will take over as interim head of Old Navy, which has been Gap’s best-performing brand recently.
