Dive Brief:
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Jill Stanton, EVP of global product at Old Navy, will become interim head at the Gap Inc. brand Friday, as the brand’s chief Stefan Larsson, considered a powerful force in improving Old Navy’s styles and logistics, moves to Ralph Lauren as its new CEO.
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Analysts say that Larsson’s departure for Ralph Lauren leaves a gaping hole at Old Navy and Gap Inc., with some wondering about the future of the overall company.
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Old Navy has been lifting Gap Inc. for several quarters now, providing the bright spot in the company’s otherwise dim earnings reports.
Dive Insight:
Larsson has put into place systems that have allowed Old Navy to more swiftly respond to sales, replenishing items that sell well more quickly. Those improvements will likely continue, and Gap Inc. CEO Art Peck says that Gap and Banana Republic will still be able to learn from the lessons Old Navy provides.
Still, investors appear to be worried, sending shares down 5.7% by Wednesday’s close, adding to the 28% fall so far this year.
“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 Bloomberg. “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.”
If the presidents at Gap and Banana Republic, and now at Old Navy for that matter, can indeed replicate Larsson’s approach, the companies may be able to institute the turnaround that investors have been hoping for.
Gap Inc. said in June that it will close 175 underperforming North American Gap brand stores in an effort to contain costs and refocus; 140 will close this fiscal year. Gap Inc. itself will also shed 250 corporate jobs, mostly at its headquarters in San Francisco.
And the company continues to work on the design side as well. Steve Sare was tapped in June to be the brand’s president of global merchandising, replacing Michelle DeMartini. Sare was most recently CMO at Fast Retailing’s Uniqulo brand and previously in merchandising positions at Express and PacSun.
Alessandra Brunialti has also returned to the company, having been at Banana Republic from 1995 to 2011, and will be VP of women’s design. She was most recently creative design consultant at alice + olivia and also worked at Calvin Klein, vince inc., and Nicole Miller in design and product development.