I was reluctant to write this article, only because I was getting kind of bored being TRR’s Chief Critic Officer railing against Gap Inc’s serial selection of five CEOs over roughly the past two decades. None of those executives had experience in apparel retailing, despite the fact that such experience was a key qualifier for the top job.
So, while Gap Inc.’s overall business (across its four major brands) following the exit of Mickey Drexler was stuck in neutral year in and year out, I coined the narrative that each of these five picks was part of Gap’s “Hail Mary” pass strategy. My most recent Gap critique was on the hire of Richard Dickson. And if you’re really interested in Gap’s unfortunate history, just key in Gap in our search bar and you will discover a series of articles covering the decades-long series of one leadership failure after another trying to reignite their brands.
BR Failed Passes
I don’t know how these most recent leadership decisions got by me. In 2020 CEO Mark Breitbard of Banana Republic left that role after three years and was named president and CEO of Global Gap Brand, Franchise, Strategic Alliances and Licensing. Honestly. I’m not quite sure this long list of responsibilities is going to make a difference.
During the same period, Gap Inc. replaced Breitbard with Sandra Stangl who came from a successful string of management positions in major home furnishings and furniture retailers and brands. Known as a strong creative leader delivering design vision, brand expansions, and financial results during her 23 years at Williams Sonoma, Stangl held numerous leadership positions including President, Pottery Barn Brands and launched two iconic brands — Pottery Barn Kids and Pottery Barn Teen.
Stangl was also President, Chief Merchandising and New Business Development Officer for Restoration Hardware where she led new assortments, inventory, and quality strategies enhancing the customer experience. Most recently, she co-founded and was Chief Merchant of MINE, a disruptive pure-play home business.
I have noted her career because it indicates that Stangl is obviously a very successful and tenured leader in the home space. But here’s the rub. The five “Hail Mary” quarterbacks for Gap Inc. were also successful in their non-apparel spaces: #1 Pepsi-Cola, #2 a Canadian drugstore, #3 a consultant, #4 a global supply chain expert, and #5 toys.
Stranger and Stranger
But wait! Stangl has had the corner office at BR since 2020. However, another hire by Gap Inc. is a real head-scratcher. Two years ago, Gap Inc. hired Asheesh Saksena as Chief Strategic Growth Officer. He joined Gap Inc. to assess value creation opportunities to ensure consistent growth across the enterprise, including its brands. Previously he served as President of Best Buy Health where he led the formation and operation of the brand’s strategic diversification into Digital Health. During his time with Best Buy, Saksensa helped expand the company’s addressable market and incubated new platforms for growth. Prior to Best Buy, he led strategy and growth at Cox Communications, Time Warner Cable, and as a Partner at Accenture.
Are you seeing a pattern here?
So, we now have the top dog of the entire Gap Inc. enterprise, CEO Richard Dickson, with his primary experience in toys; a new CEO of Banana Republic, whose career experience has been in the “home” industries, Sandra Stangl; and a corporate Chief Strategic Growth Officer, Asheesh Saksena, whose experience has mostly been in electronics, Cable TV and as a partner in a major consulting firm and communications. Just to repeat, all three gained their career expertise outside the apparel retail sector. And dramatizing all these C-suite shuffles, the #4 “Hail Mary” Gap Inc. CEO Sonya Syngal left following a very brief and bumpy two years at the helm.
Curiouser and Curiouser
What in the world is going on here? Is this an intentional mess and seemingly undisciplined throw-anything-at-the-wall-and-see-what-sticks approach? Or is this an intelligent strategic shift playing out?
For example, did Stangl convince Saksena that BR Home, mixed in with apparel, is the future, and new growth engine for BR? And is Gap Inc. going to expand its brands into other categories and potential new markets (à la Barbie)? Think about it: Was Syngal with her mostly supply chain expertise asked to leave to make a smooth transition for the toy guy? Or did her hiring of both Saksena and Stangl appear to be revolutionary? And indeed it didn’t take Stangl too long to toss “home” into the ring (since that is what was likely her default growth idea).
I’m not trying to be coy about these moves. However, I have tracked Eddie Lampert’s financial engineering of Sears to its death over a period of about two decades. The past two decades at Gap Inc. are beginning to look like a déjà vu Sears story.
BR Home. Really?
I don’t know who approved BR Home’s launch as a new brand. In my opinion, it’s a non-starter. Let me be clear. I think it’s a catastrophic mistake, particularly if they throw money behind it.
Our writer Pamela Danziger covered the launch reporting, “BR Home introduced a full suite of bedroom, living room, and dining room furniture, lighting, and home decorative accents. It will operate under the name BR Home online and will be available in select stores and New York City and Los Angeles pop-ups.”
Danziger included a statement by Sandra Stangl: “We are driven by a desire for discovery and self-expression, representing a new way to outfit yourself and your home.” Danziger responded, “Discovery is the keyword in that statement. Banana Republic is likely to discover that its customers don’t need the brand to move into the home space, where they already have an abundance of more established and authoritative options. And because the brand is already struggling with its standing in the fashion space, how will its launch into home help it discover ways to sell more clothes to more people for more money? Since timing is everything, Banana Republic is certain to discover it has picked the wrong time to launch into home, if there ever was a right time for the brand.”
Banana Republic has recently refreshed its image and style, but it’s facing serious headwinds. Danziger reports, “Banana Republic reached its zenith in 2014, with sales peaking just under $3 billion, then it hovered around $2.5 billion through pre-pandemic 2019. After dropping to $1.5 billion in 2020, it clawed its way back up to $2.1 billion in 2022. But the first two quarters of fiscal 2023 haven’t been kind to Banana Republic. First-quarter sales were down 13 percent from the same period last year and 8 percent on a comparable basis. Second-quarter continued its downward slide, down 11 percent on a topline basis and 8 percent in comp sales. With its total corporate sales flagging, dropping from $16.7 billion in 2021 to $15.6 billion in 2022, and its other flagship brands challenged too – Old Navy, down 10 percent, and Gap, down 7 percent last year – the BR Home launch seems almost a desperate rather than a strategic move at this time.”
And there’s more! TRR contributor and expert in all things home, Warren Shoulberg, was also quoted in Danziger’s piece: “The problem is, what is BR bringing to the home space that isn’t available from any number of other brands, both in-store and online, with established businesses in home furnishings?” He added, pulling no punches, “Shouldn’t Banana Republic work on fixing their clothing before tackling home, which, no matter how successful, will still be a rounding error for the Gap parent company?” Amen, Warren.
So, here’s my takeaway. When is Gap Inc. going to learn its lesson? With an endless series of leaders who have no apparel experience, it’s a real-life example of Albert Einstein’s brilliant aphorism, “The definition of insanity is doing the same thing over and over again but expecting different results.” All these “Hail Mary” passes account for nothing but déjà vu, and not in a good way.