Old Navy chief executive Sonia Syngal gets to be a Fortune 500 CEO after all.
Syngal will become CEO of Gap Inc. on March 23rd, the company announced on Thursday. Two months ago, the apparel company pulled the plug on a spin-off of the Old Navy brand that would have seen Syngal, 49, become CEO of a stand-alone $8 billion-a-year business. Old Navy is the second largest clothing brand in the U.S after Nike, and generates about 55% of Gap Inc.’s revenue.
Syngal becomes the 37th female CEO in the Fortune 500 when she takes the reins. (However, that figure will fall to 35 later in the spring with the previously announced departures of the CEOs of IBM and KeyCorp.) In addition to Old Navy, Gap Inc. owns The Gap, Banana Republic, and Athleta.
On her watch, Old Navy’s sales rose by $1 billion over a three-year period ending in early 2019. And Syngal, an engineer by training, also oversaw the fast growth of Old Navy’s e-commerce, now a $1.6 billion business, as detailed in a Fortune profile of Syngal last summer.
But more recently, the business has stumbled, hurt by intense competition from the likes of Target, T.J. Maxx, and even Walmart with their improved clothing apparel. Old Navy’s comparable sales fall 3% in the first three quarters of 2019. (Gap Inc. will report fourth quarter results next Thursday.)
Gap Inc.’s previous CEO, Art Peck, left abruptly in November after failing for years to reverse the sales slides at The Gap and Banana Republic brands. The chronically weak numbers at both brands coupled with hundreds of millions of dollars spent to spin off Old Navy rattled investors, who pressured the company to drop the spin-off plan.
Syngal is a natural choice for the job. She started with Gap Inc. in 2004 in technical roles such as supply chain management functions, sourcing, and production. After stints running The Gap and Banana Republic’s European businesses, and then Old Navy’s international business early last decade, she became head of supply-chain and product operations for all of Gap Inc. in 2013. That set her up to take the reins at Old Navy in 2016.
But Syngal has her work cut out for her when it comes to running the entire company. Thanks to consumers having so many choices, the once powerful Gap is a severely diminished brand without a clear place in the market. And Banana Republic has struggled for years to update itself at a time people dress more casually both for work and going out.
Still, those brands have their followings. And working in Syngal’s favor, Old Navy remains a juggernaut; Athleta, a Lululemon Athletica competitor, is set to soon hit the $2 billion sales threshold; and Gap Inc.’s online businesses are enormous.
“Sonia has all of the characteristics and experiences needed to effectively execute against the work ahead. She is an excellent operator who drives innovation and decisive action, and she leads with both vision and heart,” Bob Fisher, interim Gap Inc. CEO and chair of its board, said in a statement.
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