Gap CEO Art Peck to leave as clothing retailer cuts earnings forecast

Art Peck Is Out As Gap's CEO Here's What Analysts Are Saying

Art Peck Is Out As Gap's CEO Here's What Analysts Are Saying

Fisher, who also serves as the company's chairman, is Gap's largest shareholder with a 12.5% stake, according to Refinitiv data. But sales kept falling and the business declined to the point that the company chose to spin off Old Navy, its best-performing division and the motor for the company's sales in recent years. Gap plunged 7% Friday as a half-dozen Wall Street analysts slashed their price targets on the company and called the planned spinoff into question.

Robert Fisher, the son of Gap's founders, has taken over as interim chief executive officer of the retailer.

"As the board evaluates potential successors, our focus will be on strong leadership candidates with operational excellence to drive greater efficiency, speed and profitability", he said in a statement.

"Old Navy's spin-off was predicated on its out performance of Gap's other brands, but Peck's departure, after recent poor [Old Navy] sales in a flooded market, had Wall Street wondering whether the split could be delayed or abandoned altogether", Reuters said. The chain admitted to flubbing women's fashion this year and competition from discounters, like Target and T.J. Maxx, is only increasing. But Gap, which defined casual dressing in the 1990s, has also long struggled with its own deep-rooted problems - its offerings have failed to stand out from that of its rivals. But instead, the chain has struggled with sales declines, and has had to keep discounting its merchandise to get customers into its stores.

Gap chief executive Art Peck, an architect of the plan who said in February that he wanted to "write the next chapter for specialty retail", abruptly stepped down Thursday and will give up his board seat.

The very abrupt ouster of Gap Inc. Additionally, the Board has appointed Bobby Martin, chair of its compensation and management development committee, as lead independent director.

But with Peck no longer at the helm of Gap and with Old Navy's former healthy sales sagging in recent quarters ( same-store sales fell 4% in its third quarter), some industry analysts questioned whether the spin-off made sense, at least for the foreseeable future.

Estimated adjusted earnings per share for fiscal year 2019 excludes costs associated with the company's planned separation, costs related to the previously announced specialty fleet restructuring, the gain on the sale of a building, and the impact of an adjustment to our fiscal 2017 tax liability for additional guidance issued by the U.S. Treasury Department regarding the U.S. Tax Cuts and Jobs Act of 2017.

Third-quarter earnings, which Gap will report on November 21, are expected to be between $0.50 and $0.52.

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