GAP CEO Gets Lost

Just after two years, chief executive Sonia Syngal steps down, unable to fulfill the promise of rising the company back to stardom within the American public. The retailer was strong for some time, but not strong enough to propel the earnings growth the company had hoped for. F in the chat. It’s also worth noting that Sonia Syngal had also resigned from the company’s board.

The company is now hiring Bob Martin, who was a former Walmart executive, as the chief interim executive while a new candidate is found. Personally I think this transition could work out well for Mr. Martin, as the parallels between GAP and Walmart are strikingly similar. Just import a bunch of stuff overseas, slap a sticker at 20x the cost to produce, and be on your way. BRILLIANT! Also, does anyone remember how much flack you would catch in elementary school back in the day for wearing GAP (Gay And Proud)? Those truly were the days.

Although this will be no easy role for Bob Martin, as recently the company has struggled with sales, they’re balance sheet is becoming quite the monstrosity (not in a good way [too much debt]), and a waning public interest in the company (this is purely anecdotal, but how many times have you stepped into any GAP (or any of their other retail division) within the past two years? I have maybe purchased one thing from Banana Republic, and that’s about it. No offense, but it just ain’t it any more.

Q1 of this year, the company lost about $162 Million, compared to making $166 Million in Q1 2021. Ahhhhh the difference a year can make. The company has essentially just been bleeding cash, and has quite literally nothing to show for it. They’re sales growth is slowing down compared to last year, both in-store and online. Their largest contributor (Old Navy) lost a considerable amount of sales compared to the first quarter of last year. And lo and behold, Banana Republic was the only division to post higher sales Q1 2022 compared to Q1 2021. Although it’s worth noting that Athleta was close.

Inflation is likely hitting their margins, which are down nearly 10% YoY. The stock has done anything but performed adequately (it has done nothing but bled)

Well given the fact that there is a new shakeup in the C-Suite, it’s becoming quite clear that not even the likes of Kanye West can save this company. The downfall of the American archetype. All good things must come to an end I suppose.