The US textile company Gap Inc. has to look for a new boss. On Monday evening, the struggling clothing retailer announced that CEO Sonia Syngal would be stepping down and leaving the company “after a short transition period”. Until a successor is found, Executive Chairman Bob Martin will serve as interim President and CEO of the parent company of the Gap, Old Navy, Banana Republic and Athleta brands.
Syngal is leaving the group after 18 years in various management positions. From 2016 to 2020, she managed the top-selling brand, Old Navy, before being appointed CEO of the entire group.
Recently, however, the textile giant had to contend with significant problems and had to report a loss in sales and red numbers. After the disappointing first quarter of the current 2022/23 financial year, the company admitted strategic mistakes in the assortment composition, but also referred to difficult general conditions, such as the unexpectedly high freight costs.
Horacio Barbeito is the new head of the flagging Old Navy brand
Business has not gone according to plan in the past few weeks either: for the second quarter, management expects a drop in sales in the high single-digit percentage range. In addition, it warned of further burdens on earnings due to increased freight and material costs. The margins would also be burdened by a “more aggressive approach to the adjustment of the range”, which led to more extensive discount campaigns in the current quarter.
A newcomer at the helm of the flagging Old Navy label is expected to contribute to the hoped-for trend reversal. The low-priced brand had recently suffered particularly from poor strategic decisions and, according to the company, underestimated the sharp increase in demand for occasion and party fashion since the end of the pandemic-related restrictions.
On Monday evening, the company announced that Horacio Barbeito had been appointed Old Navy’s new President and CEO. Barbeito comes from the retail group Walmart Inc., where he spent a total of 26 years. Most recently, he served as President and CEO of Walmart Canada. At Old Navy, he will succeed Nancy Green on August 1, who was forced to leave at the end of April amid recent problems.