Gap CEO Continues to Show Promise - Update 2

Todd Sullivan, a financial blogger, wrote a piece that appeared in today's Seeking Alpha that rightfully praised efforts by Glenn Murphy, the new CEO of troubled retailer The Gap GPS (NYSE), to turn the company around. Murphy put together a plan, and up to this point, has managed to execute it quite successfully.

Back when Murphy was first appointed in July of last year, many analysts raised doubts on his selection due to his lack of retail clothing expertise, I on the other hand was quite positive about the selection. While it was true, Murphy had little retail clothing expertise, he managed in his previous position as CEO of Shoppers Drug Mart in Canada to demonstrate an uncanny talent for running a successful business that relied on merchandising and retail expertise. Murphy still has a long way to go with the Gap, especially in this difficult retail environment, but he deserves praise for his efforts and results so far.

Stay tuned.

For more:

Investopedia

Gap CEO Continues to Consolidate His Control

Glenn Murphy the recently appointed CEO of clothing retailer, The Gap continues to make his own stamp on the firm. Earlier today, it was announced the president of its Old Navy brand, Dawn Robertson, who had only been with the firm since 2006 would be leaving immediately. The company also announced that Tom Wyatt, president of Gap Inc.’s Outlet division, would become acting president of Old Navy while a search is conducted for a permanent replacement.

Old Navy whose brand had become stale had already begun to make great strides at changing its image with the public. Under Dawn's leadership Old Navy recently began a new logo and was about to launch a whole new line. According to a piece by Amy Merrick in the Wall Street Journal ,

Gap described the immediate departure of Ms. Robertson, 52 years old, as a mutual decision between her and the retailer.

"It became clear to Glenn and Dawn that a leadership change was necessary at the brand," said Stacy MacLean, a company spokeswoman. She said Ms. Robertson and Gap executives were unavailable to comment.

A longtime department-store executive who had been managing director of the Australian chain Myer, Ms. Robertson had been described by some as being an uneasy fit at Gap's San Francisco headquarters. She arrived at Gap less than 16 months ago, hired by Mr. Murphy's predecessor, Paul Pressler. Mr. Pressler himself left the company three months later, in January 2007.

Investors need to keep a very close eye on what Old Navy does next and more importantly, what Murphy plans for gap in its entirety.

For more:

Gap Press Release
Reuters

Update on The Gap

Back in July, The Gap GPS (NYSE) made a surprise CEO appointment. The company picked Glenn Murphy, a successful drugstore executive, as its new CEO. Prior to Murphy's appointment, The Gap was often being written off by many analysts and investors. It could be that Murphy may turn out to be a super appointment.

The Gap has managed to surprise many lately. According to a story today by Heather Burke for Bloomberg entitled, Gap First Holiday-Quarter Profit Gain Since '05 Signals Rebound, the company,

By refusing to join competitors making early-holiday markdowns, the biggest U.S. clothing retailer may post a fourth- quarter profit gain for the first time since 2005.

... After two years of declining sales, San Francisco-based Gap has cut inventory at its namesake brand to avoid having to slash prices on $98 cashmere sweaters and $148 tweed coats in what may be the slowest Christmas shopping season in five years.

The article points specifically to Gap's brand president, Marka Hansen, as the key behind the change but Murphy is close by. The article went on to point out,

Of 25 analysts who follow Gap, 12 recommend buying the shares, 11 say to hold them and two say to sell, according to data compiled by Bloomberg.

Keep a close eye on the steps The Gap follows to continue its potential comeback.