Despite its storied and iconic status as a brand, Gap has been facing an uphill battle for the past decade due to the rise of fast-fashion chains like H&M and Zara. Chief Executive Officer Art Peck joined the company in 2005 and was tasked with turning around the company’s sluggish image. Through Gap and Banana Republic’s up and down sales, Peck and company could always rely on one source of stability—the company’s less glamorous but largely profitable Old Navy. But that may not be the case for much longer.
This past week, it was announced that Old Navy President Stefan Larsson would be joining Ralph Lauren Corp. as the company's new CEO. Leaving everyone wondering, what impact will the move have on the retail giant? After the announcement, Gap’s stock took a hit of as much as 8.3 percent.
“Old Navy is the concept that’s been holding up the underperformance of the other concepts, and Stefan was the captain of the ship,” Simeon Siegel, an analyst at Nomura Securities, told Business of Fashion. “It’s easy to look at that and say there’s now a big hole in the only thing that was working at the Gap.”
Now, many are focusing on what the future of Ralph Lauren might look like under the direction of Larsson. But you’d better believe that Peck and team will be looking to stabilize things on their end as Gap looks to the future.