Art Peck, who officially assumed the role of CEO of Gap Inc. in February, did not inherit an easy job.
On Monday, the company reported sales for the first quarter of fiscal year 2015 (as well as April results, but more on that later). Net sales across its brands (Gap, Banana Republic and Old Navy) decreased 3 percent to $3.66 billion compared to the first quarter of fiscal year 2014. Those numbers were worse than they would have been if the Japanese yen and the Canadian dollar had been more stable; on a constant currency basis, net sales were down 1 percent year over year.
The company's flagship brand, Gap, took the worst hit, with comparable sales down 10 percent compared to a decrease of 5 percent in the same period a year before. Wendi Goldman, who was hired in February to replace former Gap Creative Director Rebekka Bay, has her work cut out for her. Banana Republic's comp sales were down 8 percent, versus negative 1 percent the year before. Old Navy, however, continued its three-year growth streak after a strong holiday period, with comp sales up 3 percent for the quarter.
April was a particularly tough month for the company, which it attributes to the early timing of the Easter holiday this year. Gap saw a 15 percent decrease in comp sales year-over-year, versus 3 percent growth last year; Banana Republic — which welcomed Marissa Webb's first designs for the label into stores last month — saw a 15 percent decrease, while Old Navy was down 6 percent.
Going into summer, Peck has one less challenge on his hands: Gap's e-commerce venture, Piperlime, officially shut down on April 30. Its impact on the company's bottom line will be negligible: As of the beginning of this year, it accounted for less than 1 percent of Gap's total sales.