Sonia Syngal, President and CEO of Old Navy Inc., speaks at the Fortune’s Most Powerful Women Summit in Washington, DC on Tuesday, October 22, 2019.
Sarah Silbiger | Bloomberg | Getty Images
Gap CEO Sonia Syngal is stepping down, effective immediately, the company announced on Monday, as the clothing retailer battles supply chain challenges and slumping sales.
Syngal will remain with the company for a brief transition period, and Bob Martin, the company’s current executive chairman of the board, will serve as interim president and CEO, Gap said.
Gap shares fell more than 4% in extended trading on the news.
Syngal said in a statement that it was “grateful to have the support of the board to step down, opening up a new opportunity for a fresh perspective and rejuvenated leadership to move Gap Inc. forward.”
Syngal previously ran Gap’s Old Navy business before taking over as CEO in March 2020, just days before Covid-19 began spreading across the United States. She has worked for the retailer since 2004.
Gap has also named a new chief for its Old Navy business to succeed Nancy Green who left the post in April. Horacio “Haio” Barbeito, recently president and CEO of Walmart Canada, is expected to take over the Old Navy business on August 1.
Along with the C-suite shakeup, Gap updated its second-quarter budget guidance, saying it still expects sales to decline in the “mid-high single-digit range.”
But Gap added that increased promotional activity was negatively impacting its gross margin; it now expects its adjusted operating margin percentage in the second quarter to be zero to slightly negative.
The company still expects to incur an estimated $50 million in costs in the quarter related to air freight charges and inflation.
Gap is expected to release its results for this period on Thursday, August 25.
Over the past few months, the retailer has faced supply chain hurdles that have left it with confusing sizes and styles that don’t match what its customers are looking for. During the last quarter, an unbalanced mix of clothing sizes, following a push towards plus-size styles, coupled with an increase in price-cutting promotions, weighed on Old Navy’s performance, especially.
Gap posted a net loss of $162 million in the three months ended April 30, compared with a profit of $166 million in the same period a year earlier. Revenue fell about 13% to $3.48 billion.