Off the rack… Gap shocked investors yesterday by replacing CEO Sonia Syngal barely two years after hiring her for the top job (exec chairman Bob Martin will be interim chief). Shares of the ’90s hoodie legend sank 5% after news of Syngal’s departure — and they’ve lost over half their value this year.
- Investors praised Syngal for quickly adopting pandemic trends like curb-side pickup and online options, but it wasn’t enough to offset slowing sales.
- Gap posted a $162M loss last quarter (compared to a $166M profit a year before) as late-arriving shipments made it harder to keep up with fast-fashion trends.
Wayyy-too-oversized hoodie… Over half of Gap's sales come from its Old Navy stores. Last summer, Old Navy execs ordered a wide range of clothing sizes to promote inclusivity and boost sales. But it backfired: too many XXS and XXL and not enough midrange sizes sparked a nearly 20% sales drop last quarter. Gap had to cut its profit forecast to zero as it launched steep discounts to offload bulky inventory. Gap’s other brands are doing better:
Gap’s halo effect is fading… It’s known as a family brand, where households can shop for everyone all at once (think: overalls for kids, button-ups for dad). But off-season styles and mismatched sizes have made it less of a family go-to. That could be a problem heading into back-to-school season — one of the year’s busiest shopping periods.