Gap Inc. fell on Tuesday as rising costs and discounts thwarted Sonia Syngal’s turnaround after 2 1/2 years as chief executive officer of the clothing retailer.
Chairman Bob Martin is taking over immediately as interim CEO, according to a statement late Monday, and the apparel retailer lowered its expectation for second-quarter operating margin percentage to zero to slightly negative. The shares, which fell as much as 8.7% in New York trading, have lost more than half their value so far this year.
Back in early 2020, it was Syngal, now 52, who stepped in to replace a CEO who abruptly departed amid operational problems. Predecessor Art Peck left after a scrapped plan to spin off Old Navy and failing to reignite sales growth. Syngal had been the head of Old Navy, which generates more than half of the company’s revenue.
Additionally, a deal to produce apparel with Kanye West’s Yeezy brand has failed to generate meaningful results. After announcing the project withThe company’s missteps are ill-timed as the retail industry gears up for back-to-school season, one of the biggest shopping times of the year. “As a family brand, this has a compound halo effect. When we aren’t delivering for moms, she’s less likely to come to Old Navy for her kids,” Syngal said during the company’s latest earnings call.
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