Great ResignationInflationSupply ChainsLeadership

Gap Inc. President and CEO Art Peck Steps Down—and Shares Tumble 10%

November 7, 2019, 10:17 PM UTC

Gap’s board announced that CEO Art Peck is stepping down as the company continues to struggle to turn around a long-standing sales slump.

The San Francisco-based retailer also said late Thursday that it cut its earnings outlook for the year as sales at the Gap, Banana Republic, and Old Navy fell in the most recent quarter.

Peck, who joined the company in 2005 and became CEO in 2015, will depart from the company after a brief transition. He will also step down from the board.

Effective immediately, Robert J. Fisher, the company’s current non-executive chairman of the board, will serve as president and CEO on an interim basis. In addition, the company’s board has appointed Bobby Martin, chair of its compensation and management development committee, as lead independent director.

“As the board evaluates potential successors, our focus will be on strong leadership candidates with operational excellence to drive greater efficiency, speed and profitability,” Fisher said in a statement.

The news comes as the company is in the midst of splitting into two publicly-traded companies, one for its Old Navy brand and another for the Gap, Banana Republic, and its lesser known brands.

Like many mall-based clothing chains, Gap is struggling to turn itself around as shoppers go online or to discounters like T.J. Maxx for their clothing. But Gap, which defined casual dressing in the 1990s, has also long struggled with its own deep-rooted problems—its offerings have failed to stand out from that of its rivals.

Peck had been promising investors that a turnaround is in the making. But instead, the chain has had to keep discounting its merchandise to get customers into its stores. Now, it’s turning to new ways to grab customers. In August, its Banana Republic division, following other clothing competitors, began launching an online subscription service.

Shares of The Gap Inc. slid 10% in after-hours trading Thursday.

More must-read stories from Fortune:

—New McDonald’s CEO faces resistance from franchisees
—Consumers want more sustainable products
—Hard coffee is the next big drink trend
—Gift guide: Must-have luxury items for everyone in your life
—Gift guide: The best wines to give this year
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.