Stock Prices Weighing on Retail C-suite
When Art Peck found himself out on a limb as chief executive officer of Gap Inc., there were plenty of reasons to point to. By the time he fell off his perch last week, the company’s third quarter was described as “challenging” and earnings guidance was cut dramatically, the planned spin-off of Old Navy was troubled by weaker sales and the Banana Republic and Gap brands were still struggling for a way forward. While the specifics of Peck’s departure aren’t clear, any ceo exit involves a complex equation factoring in the board, performance, the business landscape and personality — but the simple math can be seen in the stock price: Gap has been under-performing — but so have a lot of other companies, resulting in plenty of ceo departures this year in retail, and potentially many more ahead in 2020. Gap still makes money, but it’s trending the wrong way. First-half profits fell 14.3 percent to $395 million as sales slipped 2 percent. Investors who could have bet on a spin-off of Old Navy, the company’s strongest business, or a turnaround at Gap have instead turned negative. Over the past 12 months, Gap is down 39.2 percent to $16.68, including a drop of 7.6
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