Gap Inc (NYSE:GPS) Chief Executive Glenn Murphy will retire in February and hand over the reins of the apparel retailer to its digital business head Art Peck, as the company looks to tap customers' increasing preference for online shopping.
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Shares of Gap, which reported weaker-than-expected same-store sales for September, fell 8 percent in extended trading.
Peck's appointment comes into effect on Feb. 1, Gap said in a statement.
He will also join the board of the company, which owns fashion brands such as Gap, Banana Republic and Old Navy.
Murphy, 52, took over as the company's CEO in July 2007. Since then, Gap's market value has tripled as the company acquired new brands and expanded to 50 countries, including China, from about 10.
Peck, 58, joined the company in 2005 after more than 20 years at Boston Consulting Group. He headed Gap's North America business, its largest, in 2011 and 2012.
Gap also said Bob Fisher, an independent director with a 35-year history with the company founded by his parents, would become the non-executive chairman of its board.
The company reported flat same-store sales for September, hurt by weak sales in its Gap brand. Analysts on average had expected a rise of 1.1 percent, according to Thomson Reuters I/B/E/S.
The apparel retailer said weak sales in the Gap brand were expected to hurt margins in the third quarter.
Gap's shares were trading at $38.50 after the bell.
(Reporting by Yashaswini Swamynathan in Bangalore; Editing by Kirti Pandey)