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Gap Inc. Restructures Brand Leadership for Global, Digital Growth

Posted by Sheila Shayon on October 16, 2012 05:16 PM

Gap Inc. chairman and CEO Glenn Murphy announced today that it has created a new global brand management structure so that its flagship Gap, Banana Republic and Old Navy brands will each be led by a single executive with global purview beginning in fiscal year 2013. The move also creates a global innovation and digital strategy group, a first for the apparel company.

With more than 3,200 stores across its brands, the move consolidates North American, international, online, outlet and franchise divisions in an effort to improve market share. Gap has been expanding abroad and now has stores in more than 40 countries (compared with eight in 2006), but a word of caution from NASDAQ: “The company would be following the path of other apparel retailers, like Abercrombie & Fitch Co. But the road is a tricky one, especially right now due to economic conditions around the globe. Gap would do well to take a steady-as-she-goes approach.”

Beginning November 5, Steve Sunnucks, president of Gap's international division becomes global president for the Gap brand. Gap North America president Art Peck, credited with the brand’s resurgence since he was promoted in Feb. 2011, has been named to lead the innovation, digital strategy and new brands division. According to the release, "Peck will build upon the company’s leadership position in e-commerce and oversee further investments to provide our portfolio of brands with world-class digital capabilities and expertise. He will also guide the development and growth of the Athleta and Piperlime brands."

Banana Republic's president for North America, Jack Calhoun, will lead that brand globally. At Old Navy, Stefan Larsson, a 15-year veteran of Swedish retailer H&M started earlier this month as global president. Murphy himself will oversee the Gap Inc. brands' expansion in China, a priority for the retailer as it firms up its position on the global runway.

“Our strong performance gives us the confidence to make this move to bring each brand together with the goal of gaining market share around the world and enhancing shareholder value,” stated Murphy. “The global teams will move even faster in anticipating and responding to the ever-evolving needs of customers, delivering consistently great product around the world.” 

Exiting the company in February 2013, is Toby Lenk, president of online, to return to his entrepreneurial roots after delivering $2 billion in sales ahead of his division’s 2014 goal.

Gap's business has been turning around this year and in August, the company reported a 29% increase in second-quarter net income and raised its full-year profit guidance for the second time since May.

Milestones in 2012 include: 

  • the debut of a Gap outlet store in China (see photo aboe) with 45 more planned by year’s end
  • first Old Navy outside North America opens in Tokyo
  • Gap franchise stores opened or planned in Guam, Panama, South Africa, Georgia, Lebanon, Colombia, Azerbaijan, and Uruguay
  • Athleta plans 20 additional stores opened by year’s end in the U.S.
  • a new global creative and design director, Rebekka Bay
  • first physical Piperlime store opens in North America
  • and the introduction of e-commerce (Gap and Banana Republic) in Japan.

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