Gap
stock jumped on Monday after the apparel company appointed former Alo Yoga’s president to lead its athleisure brand, Athleta, in a bid to turn sales around.
Gap
(ticker: GPS) announced Chris Blakeslee would be the new president and CEO of Athleta starting Aug. 7. Previously, Blakeslee was president of sister companies Alo Yoga and Bella+Canvas.
Since Blakeslee took on the role in 2017, Alo Yoga grew to over $1 billion in sales in 2022, nearly doubling year-over-year growth, Gap said in a press release. The tech-centered athleticwear company has positioned itself as a favorite among celebrities, influencers, and other A-listers, and is rapidly gaining traction among young consumers.
“Chris is known for driving results in high-growth businesses through the blend of creativity and operational rigor,” said Bob Martin, Gap’s executive chairman and interim CEO.
Gap stock rose 4%, to $9.50, on the news, as investors bet that Blakeslee’s experience at Alo Yoga could translate to better results at Athleta. The
S&P 500
is up 0.5% in midday trading.
Once considered a bright spot in Gap’s portfolio, Athleta has been struggling to compete in a cutthroat market that has seen new brands — such as Alo Yoga — gobble up market share. Simultaneously, consumer preferences have changed since the brand’s pandemic-era heyday. People are buying less athleisure and spending more on office or occasion-focused attire.
Athleta’s same-store sales declined by 13% in the company’s first quarter, while sales fell 11% from the same time last year. Former CEO Mary Beth Laughton stepped down in March following several quarters of negative or flat same-store sales.
“We believe Athleta has incredible potential, but it has suffered from product acceptance challenges over the past several quarters,” Martin said at the time. “As we look to capitalize on this potential and remain competitive amidst a dynamic landscape, we believe now is the right time to bring in a new leader who can position Athleta for long-term success.”
Gap is also in the middle of implementing a broader plan aimed to reorganize its operating structure and cut costs. The retailer has announced two rounds of job cuts since last September. Gap plans to reach $300 million in annualized savings under its restructuring plan, with half of those savings realized in 2023.
Write to Sabrina Escobar at [email protected]
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