Report: Gap Brand Faces Uphill Climb

Gap Inc.’s new management might find the task of turning around its namesake brand more formidable than it expected. Art Peck, who succeeded Glenn Murphy as chief executive officer of the company in February, and Jeff Kirwan, who took the reins of the Gap brand from Stephen Sunnucks in December, will have a “daunting” challenge on their hands in steering the Gap brand back to growth after what has essentially been a lost decade, according to a research note from Wells Fargo Securities analyst Paul Lejuez. “While those that look back only a few years might conclude this is a brand that lost its way in 2014 after a strong 2012-13, a look back over 10 years shows this is a brand that has been losing market share and mindshare over a much longer period. Against that backdrop, it may not seem as easy to fix,” Lejuez wrote. Gap’s square footage in North America shrank 20 percent and its store count fell 30 percent between 2005 and 2014, and that contributed to a drop in sales to $4 billion from $5.4 billion. But it wasn’t a reduction in store count that sent sales down — comparable sales at Gap fell in all but

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