Glenn Murphy has announced that he will retire from his position as CEO of Gap Inc. effective February 1, 2015. The retailer’s board of directors unanimously agreed to appoint Art Peck, current President of Growth, Innovation and Digital at Gap, to succeed Murphy as CEO.
During Murphy’s seven-year tenure as CEO, GAP reported a 160% total shareholder return and a six-year compounded annual growth rate (CAGR) on earnings per share of 17%. Under Murphy’s leadership, the company acquired new brands and expanded the store locations globally, from 10 to 50 countries.
“Today, Gap Inc. is a formidable global fashion retailer with a strong foundation in place for long-term growth, therefore making this an appropriate inflection point for me to pass the baton to a leader who will take our portfolio of brands to even greater heights,” Murphy said. “With consumer expectations rapidly evolving, Art is the right leader at the right time to build on our success and ensure a compelling experience for our customers across both our physical and digital channels.”
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As part of the transition, Peck will join the board effective February 1, 2015. Bob Fisher, son of Gap Inc. co-founders Donald and Doris Fisher, will become non-executive Chairman of the Board.
Gap Experiences Minimal September Sales Increase
In other news, Gap reported September 2014 net sales growth of 1% over the previous year, increasing to $1.48 billion from $1.46 billion. Comparable store sales were flat throughout the five-week period, representing an improvement from a 3% decrease in 2013. Gap store sales decreased 3%, while Banana Republic and Old Navy boosted sales 2% and 1%, respectively.
Due to the Gap brand’s flat performance, the company expects gross margins for Q3 2014 to be moderately below Q3 2013 totals.
“September proved to be more challenging than we expected,” said Murphy. “While Old Navy and Banana Republic are performing well, we are working aggressively to ensure our entire portfolio of brands delivers to its potential.”
