Sonia Singhal, President and CEO of Old Navy Inc. , during the Fortune’s Most Powerful Women Summit in Washington, D.C., on Tuesday, October 22, 2019.
Sarah Selbiger | Bloomberg | Getty Images
the difference CEO Sonia Singhal is stepping down, effective immediately, the company announced on MondayThe apparel retailer faces supply chain challenges and declining sales.
Gap said Singhal will remain at the company for a short transition period, and Bob Martin, the current CEO of the board, will serve as interim president and CEO.
Gap shares fell more than 4% in after-hours trading on the news.
In a statement, Singhal said she was “grateful for the board’s support in stepping down, unlocking a new opportunity for fresh perspective and renewed leadership to move Gap forward.”
Syngal was previously the leader of Gap’s Old Navy business She assumed the position of CEO of the parent company in March 2020, just days before Covid-19 began spreading across the United States. She has been with Gap since 2004.
The retailer has also appointed a new president for its old marine business, After Nancy Greene left that position in April. Horacio “Hayo” Barbetto, recently president and CEO Walmart Canada is expected to take over the old marine business on August 1.
In parallel with the Group C change, Gap updated its financial guidance for the second quarter, saying it still expects sales to decline in “a nearly high single-digit range” but expects higher promotional activity to have a negative impact on gross margin.
It now sees its second-quarter adjusted operating margin ratio from zero to slightly negative.
The company still expects to incur an estimated $50 million in costs during the quarter related to air freight and inflation.
Gap is set to report results for that period on Thursday, August 25.
In recent months, the retailer has faced supply chain hurdles that have left it with mixed sizes and styles that don’t match what its customers are looking for. In the last quarter, an unbalanced mix of clothing sizes, after pushing into plus-size styles, along with an increase in price-cutting promotions, weighed on Old Navy’s performance, specifically.
The gap turned into a net loss of $162 million in the three months ended April 30, compared to a profit of $166 million during the same period a year earlier. Revenue fell about 13% to $3.48 billion.
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