Gap Inc's New CEO Art Peck To Take The Company Higher? This Analyst Thinks So

When Gap Inc GPS announced that CEO Glenn Murphy would be retiring, its shares sunk by more than 10 percent the next day. Now that Art Peck has taken over the role at Gap, analysts are divided between those who have faith in him and those who don’t.

Adrienne Yih-Tennant from Janney Capital Markets was on Bloomberg to discuss why she believes Art Peck will take the company higher.

Related Link: 'Gap Inc To Close Smallest Brand, Piperlime'

Why Do You Have So Much Confidence In Art Peck?

When asked about her support of Peck, Yih-Tennant responded, ldquo;I am an Art Peck fan.”

“He has, since 2005 when he started with the company, he’s been in almost every facet of the business that today is actually very, very successful. He was instrumental in actually launching their international global strategy, the outlook businesses – he helped launch those – and then he was actually the head of Gap North America in 2011 and 2012 when they actually had that string of positive comps.”

“So, he has seen a lot; he has done a lot for the company.”

Why Hasn’t That Shown More In Gap’s Overall Success?

“See, he just took the helm on February 1; his most recent job was obviously the president of GID, right, Growth Innovation and Digital, which is basically their e-commerce business,” Yih-Tennant replied.

“The e-commerce business is $2.3 billion; so roughly about 11 to 12 percent of the total business. So, to the extent that he has doubled that over that time period that he was there. He has done a fabulous job there.”

Hasn’t he Been Successful In Running Only The Non-Core Business Of The Company?

“Well, the interesting this is, Gap as we know, we always think of the brand play, Gap division,” Yih-Tennant said.

“Gap division is only about 40 percent of the business and that’s the piece that has really been struggling. Old Navy, on the other hand, is doing phenomenally well and actually is larger in sales, just a little bit, just over 40 percent. And the Banana [Republic] has been just sort of neutral.”

“ Banana has the potential to really turn, but its only 16 percent of the business. The total business is still only 20 percent international and that’s where the big growth piece is going to come.”

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Posted In: MediaAdrienne Yih-TennantArt PeckBanana RepublicBloombergGlenn MurphyJanney Capital MarketsOld Navy
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