Gap CEO Art Peck to step down; FY earnings forecast cut

Scenes of the Millennium Falcon at Black Spire Outpost during a sneak peek for invited guests of the Star Wars Galaxys Edge attraction at Disneys Hollywood Studios in Lake Buena Vista Fla. Tuesday

Scenes of the Millennium Falcon at Black Spire Outpost during a sneak peek for invited guests of the Star Wars Galaxys Edge attraction at Disneys Hollywood Studios in Lake Buena Vista Fla. Tuesday

Gap CEO Art Peck is leaving the company.

Gap's board of directors issued a statement saying Peck will vacate the positions and his seat on the board.

Peck, who has been CEO since 2015, will be temporarily replaced by Gap's non-executive chairman of the board Robert Fisher, the company said Thursday.

The retailer announced he will depart after a "brief transition".

Peck's departure comes as the company reported a 7 percent drop in comprobable sales globally in the third quarter.

On the heels of a quarter in which its major brands experienced sliding sales, Gap said its CEO will step down.

Old Navy, which has been a strong performer for Gap is being spun off into its own public company next year. Sales slipped 3% for its Banana Republic brand and 4% for Old Navy.

Like many mall-based clothing chains, Gap is struggling to turn itself around as shoppers go online or to discounters such as T.J. Maxx for their clothing. But instead, the chain has had to keep discounting its merchandise to get customers into its stores.

Shares of The Gap slid 10% in after-hours trading Thursday. In August, its Banana Republic division, following other clothing competitors, began launching an online subscription service.

The news was delivered in the company's quarterly earnings.

"This was a challenging quarter, as macro impacts and slower traffic further pressured results that have been hampered by product and operating challenges across key brands", Gap Chief Financial Officer Teri List-Stoll said in a statement.

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