Gap Executive Shake-Up Signals Beginning of a New Era
Change is in the air at Gap (GPS) and the shake-up starts at the top. Most notably, Gap North America's president Marka Hansen is out after a 24-year stint with the brand. It's an abrupt move after her long tenure, one that signals the company's ready for a creative reinvention. But is it too late to convince customers to come back?
Gap's had its share of struggles in 2010. Despite all its investments to invigorate with Premium Denim, black pants, and other basic threads, holiday sales were sluggish while other retailers soared. December comps were down 8 percent at Gap North America following a year of middling results. That was just a droopy cherry atop a stale cake layered with the slumping comps Gap North America's sustained since 2004, just before Hansen took the reins.
It's not like Gap North America is small potatoes in the company's family of brands which include Old Navy, Athleta and Banana Republic. The division is responsible for up to approximately 27 percent of $14 billion in overall sales. Nevertheless, Hansen's presided over a steaming pile of faux pas in addition to flagging sales.
In the last six months we've watched her writhe her way through the great logo fiasco (Little blue box! Crowdsourced design! Back to classic!), the bad press generated by charity FEED bags claiming to be made in the USA but bearing Chinese labels (yuck), and the latest scandal in which a Flickr photograph may have been illegally appropriated and stamped on a Baby Gap onesie. Loyalty to a long-time employee is lovely, but in the cut-throat world of fashion retail, it makes you wonder what took CEO Glenn Murphy so long to pull the plug.
She will be replaced by Art Peck, president of Gap's outlet division and EVP of corporate strategy. Pam Wallack, president of Gap Adult North America, will become EVP of a new Gap Global Creative Center in New York. The latter office complements Gap's recent installation on the West Coast with an office in the seat of the denim industry in downtown LA. And like it, the one-stop shop in NYC is tasked with turning out trends tout de suite.
Let's hope the team in New York will take a more holistic approach than its California cousin. Hansen noted that despite the (relative) success of Premium Denim, the company failed to produce covet-worthy tops to wear with said jeans. It's kind of hard to believe a global design team led by Patrick Robinson could fall asleep at the switch like that. Maybe they were too busy striking up collaborative deals with shoemakers such as Keds and Pierre Hardy. More likely it's proof that Hansen's leadership was too laissez-faire to look over hunched shoulders at the drawing tables and provide the missing perspective.
In any case, it's the beginning of a new era for Gap. Perhaps by continuing to wield one of Hansen's more successful efforts -- reallocating marketing dollars away from national ad spots on TV and into more in-store discounts -- devotees will continue to spend, at least until the new team Gap is ready to roll out the new racks.
Image via Gap
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