Finally, at extremely long last, the search is over: Gap Inc. has lined up a new CEO.
After more than a year without a permanent chief executive, the troubled parent company of Old Navy, Gap, Banana Republic, and Athleta said on Wednesday it had hired Richard Dickson as its new chief, effective Aug. 22. He is the operations chief and president at Mattel and instrumental in revitalizing the Barbie franchise, as evidenced by the runaway success of the recent motion picture about the iconic doll. Before joining the toymaker in 2014, Dickson had spent time in the apparel industry in a top job at Jones Group.
Thus ends an excruciatingly long CEO search that Gap Inc., all of whose brands saw net sales decline last quarter, can’t afford to mess up. The Gap and Banana Republic brands are shadows of their former selves: The Gap brand’s 2022 net global sales were $3.7 billion, or 40% less than a decade earlier—while Old Navy and Athleta, for years juggernauts sustaining the company, have fallen into decline. So when it came to the search for a new chief, interim CEO Bobby Martin repeatedly said that the board would “take the time to get this right.”
However well-regarded and well-rounded Dickson is, though, he has a big job ahead of him. His two immediate predecessors, Sonia Syngal, former head of Old Navy who left last July after only two years, and Art Peck, were both ousted for failing to fix Gap Inc.’s seemingly intractable problems, including failing to adapt quickly to changes in fashion and a bureaucratic culture. Fixing this company won’t be easy.
Syngal, whose star rose as she led Old Navy to heights before she took the Gap Inc. reins at the start of the pandemic, stumbled over the parent company’s plan to offer more inclusive sizing at Old Navy; that led to a glut of unsold inventory that had to be marked down. And her efforts to make Gap more relevant through a big collaboration with Yeezy proved ill-fated, leading to tens of millions of dollars in losses. Before her, Peck failed to restore Gap Inc. to its place as a fashion retailer leading trends.
Consumers as a whole are also pulling back on discretionary spending as they’re faced with oodles of choices: Why shop at Old Navy when you can get similar offerings at Target? Why shop at Athleta when athleisure is everywhere?
But Dickson’s résumé suggests he has as good a chance as anyone to succeed. Analysts note Dickson’s work on the Barbie turnaround in particular points to skills that will be helpful in revitalizing Gap Inc.’s often tired brands. He understood that to modernize the iconic doll, Mattel had to make it more inclusive with moves such as releasing Barbie dolls with additional skin tones and body types. Under Dickson, Mattel also changed up its marketing by advertising directly to parents.
“His reinvention of the Barbie franchise, which is currently riding on a high, is also proof that he understands how to turn around established brands that have run out of energy and steam. This is exactly the challenge he will need to address at Gap,” said Neil Saunders, managing director of GlobalData, an analytics and consulting company, in a research note.
Contrast that with excuses about “product acceptance issues” trotted out at various times by Martin and Peck on calls with Wall Street analysts over the years to explain declining sales—language that seemed to blame consumers rather than the company, and reflected a problematic way of seeing things that made a potential turnaround harder to execute.
What’s more, Dickson has experience in apparel that will serve him well. “Gap’s turnaround prospects just got better with the naming of Richard Dickson as its new chief executive officer. Dickson, who already sits on Gap’s board, has apparel experience from stints at Bloomingdale’s and Nine West,” Mary Ross Gilbert, senior retail analyst, wrote in a Bloomberg Intelligence research note.
And Dickson at least has something to work with. Athleta, whose struggles began only recently, poached its new CEO from hot yoga brand Alo. Banana Republic seemed to find its swagger back in 2022 after years of decline, and has improved its assortment and store decor. And Old Navy is a massive $9 billion brand with a big reservoir of goodwill from consumers to tap into. (Alas, the Gap brand seems not to have many green shoots at the moment.)
So kudos to Gap Inc. for hiring someone like Dickson. If anyone can do it, Dickson might well be that person.
