Gap CEO Resigns Art Peck To Take Over Stock Price 9%

Gap Inc. (NYSE:GPS) Gai Pu

Announces that Chairman and chief executive officer Glenn Murphy will leave in February 1, 2015. Her position will be taken up by Art Peck, President of the incumbent growth, innovation and digital department, together with the double blow of the same store sales data in September, which is worse than the market expectation. The Gap Inc. (NYSE:GPS) share price fell by about 9% in the trading hours after Wednesday.

This year, Art Peck, 59 years old, hops from the Boston Consulting Group Boston consulting company to Gap Inc. (NYSE:GPS) in 2005. During the 2011-2012 years, it served as the North American president of the Gap cover brand, successfully cleaned up the excess inventory and upgraded stores for the brand, and participated in the acquisition of sports Yoga brand Athleta and luxury retailer Intermix. He was promoted to chief executive and joined the board of directors of the group.

In July 2007, when Glenn Murphy became chief executive of Gap Inc. (NYSE:GPS), the market value of the group rose nearly two times, and its net profit increased by 54%. However, due to the rise of fast fashion brands and the deterioration of domestic retail market, Gap Inc. (NYSE:GPS) achieved only 2.4% growth from 2007 to today.

Overall sales in the same store in September were flat compared with the same period last year. The market is expected to grow by 1.1%. Among them, the Gap cap Pu brand recorded a year-on-year fall of 3%, far exceeding 1.7% of the market forecast. The Banana Republic Banana Republic and Old Navy Old Navy increased 2% and 1% respectively, and the expected growth rates were 1.6% and 3.5% respectively.

The Gap expects to see a slight decline in gross margins in the three quarter compared with the same period last year.

In addition, the Glenn Murphy, who revealed that she was unwilling to renew her contract with the group in the conference call, would resign as chairman of the board of directors of the group, replaced by Bob Fisher, chairman of the founder of the group of independent directors, as the non-executive chairman of the board.

Glenn Murphy revealed that the future direction has not yet been decided. WWD quoted market news that Glenn Murphy had participated in the interview of chief executive officer of Target Corp. (NYSE:TGT) Taghit department store, and was also the candidate for the next chief executive of J.C. Penney Co. (c).

Morningstar analyst Bridget Weishaar believes that Gap Inc. (NYSE:GPS) leadership change will not substantially change the group's current development strategy focused on global expansion, e-commerce and gross margin growth.

By the end of 2013, the group had 80 stores in China. Art Peck pointed out that the number of stores in China will reach 110 by the end of this year. The Group expects that China will have the potential to develop into a 1 billion dollar market in the next few years.