Dive Brief:
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Gap Inc. executive vice president and chief financial officer Sabrina Simmons will leave the company at the end of the 2016 fiscal year, the company announced Wednesday.
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Since joining the apparel retailer in 2001, Simmons has worked her way up, with positions of increasing responsibility from vice president and treasurer to executive vice president, and has been Gap’s CFO since late 2007.
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Gap has been struggling to make good on its turnaround plans, and its failure to gain traction has vexed CEO Art Peck, who suggested on Wednesday that his two years at the helm mark the end of a “period of transition” and an appropriate time for Simmons’s departure.
Dive Insight:
In September, Peck seemed exasperated by what he characterized as a dearth of fashion trends that leave consumers disinterested in accumulating new clothes and retailers at a loss for what to offer.
The once-iconic American street fashion retailer used to be top of mind for shoppers. These days, it’s closing stores, emphasizing off-price outlets and losing sales. The company recently reported adjusted second quarter earnings of 60 cents per share, compared to 64 cents a share a year ago. Q2 sales were $3.85 billion, down from $3.90 billion year over year. Gap also lowered its fiscal year guidance and said it expects adjusted earnings between $1.87 and $1.92 per share for fiscal 2016, missing FactSet analysts expectations of $1.95 per share.
Yet, Peck said Simmons' work has been “critical in establishing Gap Inc.’s capital structure framework and maintaining operating discipline across the enterprise.” Simmons has held the CFO role during a period of great leadership and strategic transition for the retailer, Peck noted. But he says that period is over, and a new chapter is opening up.
Gap's future is unclear, but Old Navy has been a bright spot for the retailer, and there have been signs here and there of recovery. The company outpaced expectations for September sales, and was able to pull back on discounts last month.
“The Gap ... looked to be less promotional this month [in October] than it has been in some time,” Ken Perkins wrote in a note emailed to Retail Dive. “The Street is looking for The Gap to post a 2.4% October same store sales decline up from a 2.9% decline forecasted last week. Both Gap Global and Banana Republic are expected to be down mid-to-high single digits while discount arm Old Navy is estimated to turn in a respectable 4.1% October comp increase.”