* Art Peck to be tapped as new head of Gap brand - source
* Says Marka Hansen leaving Feb 4
* Gap "comfortable" with Wall Street's FY profit view
(Adds detail on new Gap brand head, background)
By Phil Wahba and Alexandria Sage
NEW YORK/SAN FRANCISCO, Feb 1 Gap Inc (GPS.N)
will name its top outlet executive Art Peck as the new head of
Gap North America as it looks to speed up a flagging turnaround
at the apparel brand, a source familiar with the matter told
Reuters on Tuesday.
Earlier on Tuesday, Gap announced that Marka Hansen, who
led the Gap brand in North America since 2007, was stepping
down and her successor would be named within a day.
Multiple sources inside and outside of the company, who
asked not be named, cited Art Peck as the likely candidate to
A source familiar with the matter confirmed to Reuters that
Peck would be named.
Peck, who is also executive vice president of strategy and
operations for the company, is in the unique position of
working at both the corporate and divisional levels.
Hired in 2005 from the Boston Consulting Group, Peck
oversaw corporate strategy before being tapped three years
later by Chief Executive Glenn Murphy to head the outlet unit,
which operates stores under the Gap and Banana Republic
In a bid to potentially raise Peck's profile on Wall
Street, Murphy has cited Peck's efforts at the company in
recent conference calls with analysts, calling outlets "a very
successful part of the corporation."
The departure of Hansen was not unexpected on Wall Street,
as Murphy has expressed frustration over the slow pace of a
turnaround at that unit, which had its heyday in the 1980s and
1990s as the go-to retailer for casual American style.
Peck, who received an MBA from Harvard Business School, may
have been viewed as a "relief pitcher" by Murphy, said Stifel
Nicolaus analyst Richard Jaffe.
"Through his dual roles ... he's had a bird's eye view of
the Gap division that makes him uniquely qualified to hit the
ground running," said Jaffe.
Murphy's style as CEO is "deliberate and thinking a few
innings out. This change with Marka was telegraphed at least
three quarters ago."
Hansen -- a 24-year company veteran who held top roles at
Gap, Banana Republic and in the International division -- was a
merchandiser charged with attracting new design talent to bring
the most appealing line of clothing into stores and simplifying
But while Hansen succeeded in making the supply chain
function more efficiently and naming the respected Patrick
Robinson as head designer, her efforts did not bring about a
lasting turnaround in sales.
Despite the successful launch of jeans and black casual
pants that sparked hopes the retailer was looking to its
one-time signature look of classic, casual and comfortable
style, the gains could not be sustained.
Most recently, Hansen's attempt to update Gap's iconic logo
came under intense fire from customers who preferred the
original blue box design.
The outcry in October forced Hansen to backtrack, and Gap
scrapped the new logo just one week after launching it. Hansen
acknowledged at the time that the company "did not go about
this in the right way." [ID:nN11138046]
Gap, which began in 1969 San Francisco as a seller of
jeans, has struggled in the past decade with intense
competition, a series of executives and mixed strategies to
lure consumers -- all of which sent Gap's loyal customers
scurrying to rivals.
Although Hansen's tenure helped stem that tide, the
performance of stores has been inconsistent. Sales at Gap's
namesake North American stores open at least a year, or
same-store sales, fell 8 percent in December and were negative
in five other months during 2010.
"The competitive environment is much more challenging than
it was in Gap's glory days and it would be difficult for any
merchant to fix," wrote Nomura analyst Paul Lejuez in a note.
Gap, which also operates the Old Navy and Banana Republic
chains, also said on Tuesday it was "comfortable" with the
current Wall Street profit view for its just-ended fiscal year.
Wall Street analysts on average are expecting a companywide
profit of $1.82 per share for the year, according to Thomson
The retailer said it would comment on its outlook on
Thursday, when it reports its January sales results. Analysts
estimate companywide same-store sales fell 2.9 percent last
Gap shares closed up 25 cents to $19.52 on the New York
(Editing by Gerald E. McCormick, Lisa Von Ahn, Gunna Dickson,
Bernard Orr and Andre Grenon)