Look! Gap cancels plan of Old Navy spin-off, CEO leaves
The splitting project of the chain was sponsored by Art Peck, who left the company last November. Leaving Neil Fisk to lead, as the new president and CEO of the Gap brand.
Gap continues as one company. The American group, the fourth-largest fashion retailer, has canceled the Old Navy spin-off, confirmed the group in a statement. On the other hand, the group has announced the departure of Neil Fiske, president and CEO of the Gap brand.
The group first announced its intention to split Old Navy into an independent listed company in March last year, with the aim of completing it this year. However, the departure in November of Art Peck, CEO of the group at the time and promoter of the spin off, left the operation in midair.
Robert Fisher, son of the founders and interim CEO, has attributed the decision of cancellation to the costs and complexity involved and to the group’s worst performance in recent quarters.
Gap has attributed the decision to cancel the spin-off to the cost and complexity of the project
“While the objectives of the separation remain relevant, our board of directors has concluded that the cost and complexity of splitting into two companies, combined with softer business performance, limited our ability to create appropriate value from separation,” pointed Robert Fisher, the interim president and CEO.
“The work we’ve done to prepare for the spin shone a bright light on operational inefficiencies and areas for improvement,” continued Fisher. “We have learned a lot and intend to operate Gap Inc. in a more rigorous and transformational manner that empowers our growth brands, Old Navy and Athleta, and appropriately focuses on profitability for Banana Republic and Gap brand,” concluded the interim CEO.
The company continues to look for new managers for the group and the Gap brand
Fisher and a group of executives took over new managerial roles, acting as an interim replacement for Pecker. Mark Breitbard, president and CEO of Banana Republic, now leads Gap, Banana Republic, Athleta, Janie and Jack, Intermix and Hill City.
Sonia Syngal remains at the helm of Old Navy; Teri List-Stoll, chief financial officer, leads corporate operations, and Julie Gruber, chief compliance officer, is in charge of administrative functions.
Gap has also revised its forecasts for the end of this year. The company currently expects total company fiscal 2019 comparable sales and net sales to both be at the higher end of its previous guidance range of down mid-single digits and down low-single digits,
