This past weekend, we learned that a high-level member of Gap's (NYSE:GPS) management team is leaving the company. This time around, there's none of the usual corporate PR-speak about spending more time with family, either. The evasive wording in the press announcement might make some of us think the real message to the departing executive is, "Don't let the door hit your fanny on the way out."
Nick Cullen, executive vice president and chief supply chain officer, will no longer work at Gap as of Mar. 10. In the press announcement, President and CEO Paul Pressler simply said of Cullen's departure, "I want to thank Nick for his many contributions and wish him well."
Although Pressler said the company's supply chain organization has been strengthening over the last two years and is a competitive advantage, Gap said it does not plan to hire a replacement for Cullen and is instead splitting its sourcing and logistics functions. (Doesn't that sound a bit contradictory?) A former executive, Stan Riggio, is to come out of retirement in order to head up the company's sourcing division.
It's bad timing after yet another lackluster quarter from Gap, which was followed up by word of continued anemic same-store sales last week. It's also bad timing, considering the fact that Gap has lost quite a few executives in recent history. I took a trip around the Internet to jog my memory and discovered that over the last several months, quite a few execs left the company; the senior vice president of real estate, Alan Barocas, retired, while Andrew Rolfe, the president of the international division, left the company to pursue a career at a private equity firm. Vice president and general manager of gap.com, Felix Carbullido, also left the company. It's also not too comforting to know that a top executive of merchandising for the new Forth & Towne concept went on personal leave, while a merchandising executive who has been on board for 14 years left the company "voluntarily."
Although it's arguable that getting some fresh blood into the company might help Gap right its ship, such instability can't be giving investors too much reason to feel confident about the way things are going.
I can't help but add one more low blow here. In January, eBay's (NASDAQ:EBAY) Meg Whitman said that she wouldn't seek re-election to Gap's board of directors. Sure, maybe the comment about her "other professional commitments" was perfectly honest (granted, eBay has had some pretty exciting developments recently, such as its acquisition of Skype). On the other hand, it's not hard to imagine why Gap wouldn't seem like a great use of her time, the way things are going now.
I count myself as one of the people who is having a hard time believing Gap is going to pull itself together anytime soon. However, maybe the biggest irony of all involves growing investor impatience with Gap's continued failure to execute. Given the protracted troubles at Gap, it's not hard to imagine that more and more investors may start hoping that Pressler himself might move along.
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Alyce Lomax does not own shares of any of the companies mentioned.
