Stefan Larsson, Old Navy’s global president, will have his last day on the job on October 2.
He’ll replace Ralph Lauren as CEO of Lauren’s namesake company.
But what will Gap do without Larsson?
After all, Larsson is largely responsible for Old Navy’s resurgence, analysts say.
“Larsson is largely credited with leading the cultural and process improvements that have contributed to Old Navy’s success,” RBC Capital Markets analyst Brian Tunick said in a note reported by Bloomberg.
Old Navy has grown to become Gap Inc.’s rising star, with sales growth outpacing the namesake brand. Consider it the company’s saving grace.
Old Navy has a stellar supply chain, is more affordable, and has nailed the demanding pace of fast fashion.
Even CEO Art Peck has acknowledged this.
“Old Navy is farthest ahead in realizing this with the changes that have taken place, obviously, and the challenges in the business at Gap, changes in leadership, challenges in the business. Those two businesses lag. Banana is probably in the middle,” Peck said in anearnings callearlier this year, referring to Banana Republic, “and Gap is farthest behind.”
Some analysts fear his departure will endanger Old Navy again. Worse, it could damage the Gap as whole.
“Old Navy is the concept that’s been holding up the underperformance of the other concepts, and Stefan was the captain of the ship,” Nomura Securities analyst Simeon Siegel said to Bloomberg, “It’s easy to look at that and say there’s now a big hole in the only thing that was working at the Gap.”
“The biggest concern is that he’s been orchestrating the entire turnaround at Old Navy, and without him it’s going to fall into the same rut as the Gap,” Siegel added when speaking to Bloomberg. “That remains to be seen.”
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But Peck is confident that Larsson’s interim replacement, Jill Stanton, fits the bill.
“We have an impressive team at Old Navy, with some of the best creative and business talent in the industry, and they are delivering consistent results,” Peck said in a release. “We have a clear strategy in place, and I have every confidence the brand will continue to build on its momentum and realize its substantial growth potential.”
Stanton, currently Old Navy’s executive vice president of global product, is no stranger to high-profile companies. She worked at Nike for nearly 14 years as the vice president and general manager of global apparel.
Meanwhile, Gap Inc. has other things to worry about – like its struggling namesake brand.
On an earnings conference call this August, Peck explained that customers would see major changes at Gap come spring 2016.