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The layoff bug continues to bite, and Gap is the latest victim.
Last week, the company announced plans to lay off 1,800 workers in an effort to save $300 million. The cuts will affect workers from Gap’s headquarters, as well as those in “upper field” roles, i.e., leadership positions at regional stores.
Gap tooth: Gap, which also owns and operates Banana Republic, Old Navy, and Athleta, has struggled to boost its gross margin and reach profitability. Like many retailers, the company has dealt with obstacles including inflation, inventory, and air freight costs.
- On top of that, leadership has been in flux. Former CEO Sonia Syngal abruptly left the company last July, and Gap has yet to find a permanent replacement.
- Athleta CEO Mary Beth Laughton left the company last month, and Gap axed its chief growth officer role at the same time, on the day of its Q4 2022 earnings call.
“We are taking the necessary actions to reshape Gap Inc. for the future—simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” interim CEO Bob Martin said in a statement.
Gap’s Q4 2022 sales were down 9% from 2019’s pre-pandemic level, largely due to the closure of 300+ Gap and Banana Republic stores that EVP and CFO Katrina O’Connell described as “nonproductive.”
- That quarter, the company reported $4.24 billion in sales, a 6% year over year decline, and a net income loss of $273 million.