The Gap’s (NYSE:GPS) CEO, Sonia Syngal, abruptly stepped down from her position, and GPS stock has fallen 5% in response so far today. Syngal’s resignation, which was announced by The Gap yesterday after the market closed, will become effective following a brief transition period.
Syngal became CEO of the apparel retailer in March 2020 after serving as the CEO of its somewhat successful Old Navy unit. She has spent 18 years working at the company.
Syngal’s efforts to turn The Gap around by attempting to revitalize its fashion and signing Kanye West to a lucrative endorsement deal were widely seen as unsuccessful.
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The retailer’s revenue last year was little changed versus its level in fiscal 2019 and 2018. Moreover, its operating income came in at $819 million last year, down from $1.41 billion in its fiscal year that ended in February 2019.
Last quarter, the company reported a per-share loss of 44 cents, while its revenue sank 13% year-over-year. The retailer said it expects its sales to drop about 1% to 5% during its current fiscal year.
Also not helping Gap’s outlook was the ouster of the CEO of Old Navy, Nancy Green, in April. At the time, Syngal stated:
“As we look to seize Old Navy’s potential, particularly amidst the macro-economic dynamics facing our industry, we believe now is the right time to bring in a new leader with the operational rigour [sic] and creative vision to execute on the brand’s unique value proposition.”
Bob Martin, the firm’s executive chairman, will become interim CEO of The Gap, which has already started looking for a permanent replacement for Syngal.
In the wake of Syngal’s departure, Wells Fargo lowered its rating on Gap’s shares to “equal weight” from “overweight.” The firm is worried the company’s financial results will continue to deteriorate.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.