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Old Navy chief out as sales falter again

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Old Navy chief out as sales falter again

The Gap brand, which lost its luster and was stuck in the doldrums for years, has become the “star of the show” at Gap Inc.

Following a series of quarterly sales misses, Old Navy is getting a new CEO. On Nov. 2 Haio Barbeito will move into an advisory role after four years at the helm.

Replacing him is Michael Francis, who took dual roles at Gap Inc. when he arrived in March, including chief customer officer at Old Navy. He’s had an advisory role at Walmart, as well as leadership positions at DreamWorks Animation, J.C. Penney and Target.

Gap Inc. announced the transition Thursday, when it also reported another disappointing performance at its value brand. Old Navy Q2 net sales fell 4% year on year to $2.1 billion, with comps down 4%, along with “an unanticipated slowdown in traffic” in the period.

The namesake Gap brand and even Banana Republic in Q2 overshadowed Old Navy, the conglomerate’s biggest brand and usually a dependable sales juggernaut.

Gap brand Q2 net sales rose 9% to $844 million and comps surged 10%, while Banana Republic net sales rose 1% to $478 million, with comps up 3%. Overall Gap Inc. net sales fell 2% to $3.7 billion and comps dropped 1%, dragged down not just by Old Navy but also Athleta’s 12% declines in net sales and comps.

Gap Inc. CEO Richard Dickson said the Q2 result at Old Navy was only a “modest miss,” given the known merchandising issues that already led to sales weakness in Q1 .


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