Old Navy Hires Walmart Marketplace Fashion Lead as Sales Slide
Gap Inc. has reportedly named Nicole Colombo to run women's merchandising at Old Navy, as the value brand gets a new CEO after sales fell 4% in the second quarter.
Gap Inc. has reportedly hired a Walmart marketplace executive to lead women's merchandising at Old Navy. The move comes as the value brand changes CEOs after a 4% fall in second-quarter sales.
The new merchant
The hire is Nicole Colombo, according to her LinkedIn page. Gap Inc. and Old Navy had not replied to the request for comment at the time of writing. For the past three years she has been general manager of fashion at Walmart's marketplace. Before that came nearly six years at eBay.
It is also a return. Early in her career Colombo worked at Gap Inc. Her years there included a post as lead merchant at Banana Republic factory stores, covering women's and petites.
A change at the top
Michael Francis takes over as Old Navy CEO on Monday from Haio Barbeito. Barbeito, once CEO of Walmart Canada, took the role four years ago. Francis previously held an advisory role at Walmart. He arrived at Gap Inc. in May with two jobs, one of them chief customer officer at Old Navy.
Falling sales and analyst doubts
Gap Inc. executives first described the problem as fashion and pricing misses that were being fixed quickly. In the first quarter, growth was tepid. In the second quarter, sales and comparable sales each fell 4%. The troubles now look more entrenched than they first appeared.
Analysts led by Tom Nikic of Needham said last week they were concerned Gap Inc. is not adequately addressing "the recent slowdown at Old Navy, which could be more persistent than management expects."
Evercore ISI analysts led by Michael Binetti linked a surprise traffic dip in June to the brand's marketing. Traffic fell when marketing moved away from a product focus toward a broader brand campaign, and it stabilized after Old Navy went back to product marketing, according to Gap. Retail Dive notes that the more culture-oriented marketing that resonated with Gap brand customers may not work as well at Old Navy.
New categories
Old Navy launched an activewear subbrand in September and is moving into accessories and beauty. Gap Inc. CEO Richard Dickson earlier this year called those higher-margin categories "sleeper categories."
Our View
A new CEO and a new women's merchandising head mean Old Navy's leadership has changed at two levels. Old Navy's next sales report will be the first test of whether the product mix improves. The record so far, a 4% decline after a promise of quick fixes, sets a clear bar to beat.
Source: Retail Dive