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Gap's Sales Slip as It Struggles to Hit the Right Style Note

The all-American brand is still grasping for that retail pixie dust.
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Gap continues to see its sales slip under creative director Rebekka Bay, with comparable sales dropping 5 percent in the third quarter, which ended Nov. 1. While Gap Inc. CEO Glenn Murphy shifted the blame off of Bay after the brand reported subpar earnings in the spring — she didn't have a full staff yet, she needed a good merchandising partner — at this point it's clear that Gap is just missing the mark with shoppers.

The retailer brought in $1.56 billion during the quarter, just below the $1.6 billion it saw at the same time last year. Across all its brands — Gap, Old Navy, Banana Republic, Piperlime, Athleta and Intermix — Gap Inc.'s sales flatlined at $3.97 billion.

Incoming CEO Art Peck, who will take over for Murphy on February 1, acknowledged on the company's earnings call Thursday afternoon that Gap still has work to do in getting its aesthetic right. That's a job that falls to both Bay's design and Michelle DeMartini's merchandising teams.

Peck noted that he and Jeff Kirwan, Gap Inc.'s current president of Greater China and the newly named global president of Gap, will be also be working to right the brand when they take up their new positions Feb. 1. The retailer made waves when it hired the flashy, promising Patrick Robinson to head up design, only to watch his work fall flat; Bay came from a great retail pedigree as a founder of Cos, but her work has yet to prove itself sales-wise. But maybe after this management change-up, things will start to improve for the brand. 

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Update: This post has been corrected to reflect the fact that $1.56 billion is below $1.6 billion, not above it as was previously reported. Fashionista regrets this error and vows to drink more coffee before writing.