Leading apparel retail chain,
), in the process of achieving superior long-term growth has
created a new business structure that places the global
operations of its brands under one executive. With this strategy
of uniting its operations, the company expects to speed up its
ability to swiftly respond to the evolving consumer needs, while
expanding its world-wide presence and boosting shareholder value.
Gap announced that with the commencement of fiscal 2013, its
North American, international, online, outlet and franchise
divisions will be spearheaded by a single global executive for
each of its brands - Gap, Banana Republic and Old Navy.
Additionally, the company aims at bolstering its online presence
as well as making technological advancements with the creation of
a new Innovation and Digital Strategy team.
To facilitate this transition, the company made a few alterations
in the existing management positions, which will be effective
November 5 onwards. The company has promoted the president of
Gap's international division, Steve Sunnucks, to the position of
the Global President, overlooking operations from New York.
Assisting Sunnucks from San Francisco, Mark Breitbard, the senior
product leader for the brand in the U.S. and Canada, will now be
appointed as the President of Gap North America.
Art Peck, the current president of Gap North America, has been
elevated to the position of President of the new innovation,
digital strategy and new brands division.
At Banana Republic, Jack Calhoun, will assume his new role as the
Global President and will focus on all channels and markets
globally. He currently serves as the division's president. At Old
Navy, the company made an early start with this strategy,
appointing Stefan Larsson as the Global President in April. He
has assumed the new role starting this month.
Additionally, management indicated that it sees China operations
as a major long term opportunity for its brands. Hence, the
company has placed the China division under the direct
supervision of Chairman and CEO, Glenn Murphy.
Nancy Green, presently working as the product leader for Old
Navy, has been given the new role of supporting China operations.
In her new role, she is empowered to channel the product
assortment and merchandise for the China market.
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Further, management stated that the current president of its
online division, Toby Lenk, will be leaving the company following
the transition in February 2013.
These changes are the result of the management shifts made in
2011 that targeted uniting the specialty and outlet divisions and
also setting up the Gap Global Creative Center in New York.
Over the years, Gap's five brands and more than 3,200 stores have
spanned across over 40 countries globally, expanding
significantly compared to operating in only eight countries in
2006. The company mainly competes with national and local
department stores and discount stores, such as,
American Eagle Outfitters Inc.
The TJX Companies Inc.
), which offer products at fire sale prices.
Gap currently maintains a Zacks #1 Rank, which translates into a
short-term Strong Buy rating. Our long-term recommendation on the
stock remains Outperform.