Struggling retailer Gap Inc. (San Francisco) said it plans to decrease its management layers and create a consistent organizational structure across its brands (Athleta, Banana Republic, Gap and Old Navy).
The company also eliminated the role of Chief Growth Officer held by Asheesh Saksena and announced the departure of Athleta President and CEO Mary Beth Laughton, both effective immediately, along with the exit of Chief People Officer Sheila Peters at the end of the year.
Gap disclosed those actions in its earnings report for its fourth quarter and fiscal year ended Jan. 28. For the latter period – which included the retailer cutting ties with controversial artist Ye and his merchandise line – Gap reported net sales of $15.6 billion, down 6 percent compared to a year earlier, and a net loss of $202 million.
Looking ahead, the retailer said it expects its various steps to result in annualized savings of $300 million. As for its store stable in the coming year, the company plans to close 50 to 55 Gap and Banana Republic outlets and open 30 to 35 Athleta and Old Navy locales. (Overall, the company currently operates a total of 3352 stores, down from 3399 a year earlier.)
“To enter fiscal 2023 in a more competitive position, we took quick and effective action to clear excess inventory, improve assortment balance, particularly at Old Navy, and to meaningfully optimize our cost structure, resulting in $550 million in annualized savings identified to date,” said Bob Martin, who has served as Gap Executive Chairman and Interim CEO since last summer. “The board is getting close to choosing the next CEO for Gap Inc. As a result of the work we have underway to build a stronger foundation and restore the company’s creative muscle, we are optimistic that this will provide our new leader with a quicker ramp in driving consistent, profitable growth over the long term.”