Gap reported mixed results on Thursday and underwhelming current-quarter guidance.
executive, who started in the new role on Tuesday, is a branding expert who oversaw Mattel's Barbie franchise. Gap is betting Dickson can breathe new life into Gap's brands: its namesake banner, Old Navy, Banana Republic and Athleta.quarter after quarterFor the fiscal second quarter, sales at the namesake Gap banner were down 14% year over year; sales at Banana Republic were down 11%; at Old Navy, down 6%; and at Athleta, down 1%.
"We're seeing encouraging signs of progress, as our teams streamline the way we work so we can focus on growth-driving initiatives – a virtuous cycle that we'll look to become our norm," Dickson said in a news release.
Gap's chairman Bob Martin, who served as interim CEO for more than a year prior to Dickson's appointment, had been working to restructure the business and streamline its management organization so the new chief executive would be able to hit the ground running as soon as he arrived., or about 25% of its corporate roles, which has increased the number of direct reports for each manager from two to four and reduced management layers from 12 to eight, the company said previously.
The cuts were designed to remove layers of red tape and bureaucracy to make Gap more nimble in its decision-making and focused on its creative efforts, the company said previously. The layoffs are saving Gap about $300 million, the first half of which will come in fiscal 2023. During its last quarter ended April 29, Gap's margins shot up 5.6 percentage points year over year to 37.1%, sending its stock surging in aftermarket trading despite another quarter of declining sales.
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