After seven years, Gap Inc. CEO Glen Murphy will step down as chief executive in February. Shares of Gap Inc (GPS) fell more than 12 percent in the early hours of Thursday after word of Murphy’s departure. This marks the companies biggest one day drop in three years. Shares were rising slightly by Thursday afternoon.
Murphy joined the company in 2007 when Gap Inc was having a record loosing year. He is noted for turning the company profitable again. Shares have more than doubled during the seven years of Murphy’s employment. He had acquired Athleta in 2008, an athletic-apparel brand and Intermix in 2012, a luxury boutique chain. Both brands are geared towards women.
Gap Inc was founded in San Francisco, California by Donald and Doris F. Fisher in 1969. Their son, Bob Fisher will act as non executive chairman after Murphy steps down, a seat he had held while CEO. The company includes Gap, Banana Republic, Old Navy, Piperlime, Athleta and Intermix. It has become a multinational clothing and accessory retailer.
In February when CEO Murphy steps down, Art Peck will become the chief executive at the Gap. Peck joined the company in 2005. Currently the president of growth, he oversaw six consecutive quarters while he was president of the original Gap brand between February 2011 and December 2012.
Peck also managed to add digital pizzazz, according to Fast Company, to Gap and Banana Republic stores. Customers with smart phones were able to scan articles of clothing in the store and gather ideas to help complete the outfit all through a smart phone application. In his initial role as senior vice president of strategy and operations, where he worked closely with current CEO Murphy, Peck was responsible for launching franchises, Gap, Banana Republic and Old Navy in 40 countries.
Peck was also involved in Project Red, a campaign to fight AIDS in Africa through the sale of certain products with front man U2 rock band, Bono. He has not given a formal interview concerning his new role yet but did appear in a recent Gap Inc video showing support for a jump in minimum wage. “It’s the right thing to do” he said.
Among other priorities, Peck will be focused on the brands digital sales. Shoppers are increasingly looking online for deals and mall traffic is dwindling. “I’m really passionate about digital and physical coming together” he said. “At our core, we’re a product company, I’m passionate about product.” With total market shares down 6.2 percent this year, Peck will need to make those two things work together to bring up sales in their brick and mortar stores.
The drop in share price was expected once the statement of Murphy stepping down was public. “Investors like Glenn.” Dorothy Lakner, a New York based analyst at Topeka Capital Markets, said during an interview on the topic. Betty Chen, a San Francisco based analyst at Mizuho Securities said, “There is a little concern, even as they’re handing off the reigns to a very experienced executive and an insider.” CEO Murphy said he has no plans in February after he steps down from Gap Inc.
By Paul Sears
Photo by Neff Connor Flickr
Cover photo courtesy of Christopher Chan Flickr