Gap Executive Departure Shakes Confidence in Shares

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Gap Inc. (NYSE: GPS) shuffled the deck of its executive leadership in an announcement early on Tuesday. Specifically, the retailer said that its president and chief executive of the Gap brand, Jeff Kirwan, will be leaving the company.

Prior to this role, from 2011 to 2014, Kirwan led the greater China business for Gap, most recently as president. In this capacity, he was responsible for all brands and channels in mainland China, Hong Kong and Taiwan.

Kirwan joined Gap in May 2004, coming from Target, where he was the regional group director for the Western Region.

A search is now underway for a new president of the Gap brand. In the interim, Brent Hyder, current Gap executive vice president of Global Talent and Sustainability will oversee the brand. Prior to his current role, Hyder served as chief executive officer at the Gap brand. He also served as vice president and general manager of Gap Japan K.K., leading all aspects of the Gap business in Japan.

Art Peck, CEO of Gap, commented:

Under Jeff’s leadership we made significant progress on the operating model of Gap brand. We are faster and more responsive than ever before, we radically improved quality and fit, and we centered the brand on the aesthetic that our customers love: casual, optimistic and American. We have also seen the results of exceptional marketing and customer engagement reflected in increased traffic, improved sales and the strength of the digital business.

Peck added:

While I am pleased with our progress in brand health and product quality, we have not achieved the operational excellence and accelerated profit growth that we know is possible at Gap brand. As we move into the brand’s next phase of development, Jeff and I agreed it was an appropriate time for a change in leadership.

Shares of Gap were last seen down 5.9% at $31.32 early Tuesday. The stock has a consensus analyst price target of $31.37 and a 52-week trading range of $21.02 to $35.68.