Gap Inc. CEO Sonia Syngal is stepping down, sticking around only for a brief transition. Effective immediately, board chair Bob Martin is taking her place on an interim basis, per a company press release Monday.
Horacio Barbeito, most recently president and CEO of Walmart Canada, on Aug. 1 will take over as Old Navy president and brand CEO, the company also said. He replaces Nancy Green, who left abruptly in April.
Gap Inc. also said it is grappling with higher prices on raw materials and freight and will use air freight to the tune of $50 million in the second quarter. Aggressive promotional pricing to clear inventory is also pressuring gross margins. While, as before, it expects Q2 net sales to fall in the high-single digit range, it now believes Q2’s adjusted operating margin percentage will be zero to slightly negative.
Syngal’s arrival two years ago was supposed to be a fresh start for an apparel conglomerate that had staked its future on its Old Navy value brand, then contemplated spinning off that brand, then returned to seeing it as the fulcrum of its success as it turned around its ailing Gap and Banana Republic labels.
It’s not exactly clear why she’s leaving now, according to GlobalData Managing Director Neil Saunders. But while she was seen as possessing operational savvy, the company has struggled in that area, he said.
“As much as Syngal has moved things forward, progress has been slow, and initiatives have been piecemeal rather than part of a coherent grand plan of reinvigoration,” Saunders said in emailed comments. “The result is a company that in its core businesses, still suffers from many of the same issues that have dogged it for years.”