Sonia Syngal, President and Chief Executive Officer of Old Navy Inc., speaks at Fortune’s Most Powerful Women Summit on Tuesday, October 22, 2019 in Washington, DC.
Sarah Silbiger | Bloomberg | Getty Images
Sonia Syngal, CEO of Gap, is stepping down effective immediately, the company announced on Monday as the clothing retailer grapples with supply chain challenges and slumping sales.
Syngal will remain with the company for a brief transition period and Bob Martin, the company’s current chairman of the board, will serve as interim president and CEO, Gap said.
Gap shares fell more than 4% in after-hours trading on the news.
Syngal said in a statement that she is “grateful to have the board’s support in stepping down, ushering in a new opportunity for fresh perspective and rejuvenated leadership to move Gap Inc. forward.”
Syngal was previously head of Gap’s Old Navy business before becoming CEO of the parent company in March 2020, just days before Covid-19 began to spread across the United States. She has been with Gap since 2004.
The retailer also appointed a new boss for its Old Navy store after Nancy Green left that post in April. Horacio “Haio” Barbeito, most recently President and CEO of Walmart Canada, is expected to take over the Old Navy business on August 1.
Along with the C-suite reorganization, Gap updated its second-quarter guidance, saying it still expects revenue to decline “roughly in the high single digits,” but expects higher advertising activity to negatively impact gross margin.
The company now expects its adjusted operating margin percentage to be zero to slightly negative in the second quarter.
The company continues to project an estimated $50 million in charges during the quarter related to air freight costs and inflation.
Gap will report results for this period on Thursday, August 25th.
The retailer has grappled with supply chain obstacles in recent months that have resulted in jumbled sizes and styles that don’t match what its customers are looking for. Last quarter, an unbalanced mix of clothing sizes, followed by a trend toward plus-size models, coupled with a surge in price-cutting promotions, particularly weighed on Old Navy’s performance.
Gap reported a net loss of $162 million for the three-month period ended April 30, compared to a profit of $166 million for the same period last year. Revenue fell about 13% to $3.48 billion.