Mattel COO Richard Dickson is leaving the Barbie party while it’s still popping, to helm an apparel company in the doldrums.
Dickson, who has served on Gap Inc.’s board since November, will become its chief executive officer as of Aug. 22, the apparel conglomerate announced Wednesday.
The company has been in search of a CEO since Sonia Syngal’s abrupt departure a year ago, and said in March that it was close to naming someone. Board chief Bob Martin has served as CEO in the interim. Dickson will receive an annual base salary of $1.4 million and an initial $350,000 bonus, plus stock options. He will also be eligible for an annual target bonus equal to 185% of his base salary, per a filing with the Securities and Exchange Commission.
In some ways, Dickson will face familiar challenges at Gap, according to GlobalData Managing Director Neil Saunders.
“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,” he said in emailed comments. “This is exactly the challenge he will need to address at Gap.”
In an interview last month just ahead of the iconic toy’s blockbuster movie premier, Dickson noted that his team’s comeback approach involved years of work.
“First and foremost, it's about the brand purpose — inspiring the limitless potential of girls,” he said at the Cannes Lions International Festival. “We talk about design-led innovation, which is really about studying our consumer and understanding their wants and needs. And then third, of course, is cultural relevance.”
"Being CEO of Gap is not for the faint of heart.”
Neil Saunders
Managing Director, GlobalData
Gap Inc., especially its namesake brand, has struggled with who its customers are and long ago lost its cultural relevance, analysts say.
“Of the many problems that Gap has had, one of the main ones is — what does Gap stand for? What do they sell? Who is that customer? Why do we go into that store?” Jane Hali & Associates analyst Jessica Ramírez said by phone. “Then there's continued issues, where its products haven’t been consistent. They have maybe a collection or two a year, or within two years, that’s been pretty decent, but then everything else falls apart.”
The problem isn’t just at the core Gap brand, which Saunders said “is in desperate need of reinvention.”
“The deep-seated problems at Old Navy need to be addressed, the faltering recovery at Banana Republic needs to be put back on track, and the now fading momentum at Athleta needs to be reinvigorated,” he said. “In short, being CEO of Gap is not for the faint of heart.”
Add to that quality and inventory management issues across its brands, including at Athleta where high expectations for growth have given way to falling sales, Ramírez said. The activewear brand itself just appointed a new chief executive this week. Dickson’s operational background could be key to getting a grip on those ongoing problems, which has forced Gap to continue with deep markdowns while peers have recovered, she said.
Given Gap Inc.’s longstanding problems of cultural relevance and operational missteps — and, in its detour with Yeezy, even controversy — the company and its investors must have patience, Saunders warned.
“While this is a good appointment, we hope that Mr. Dickson is given the time and space to implement changes which are long overdue,” he said. “As history has shown, Gap’s major investors can be resistant to adaptation, and exert too much control over the direction of the company. In our view, there is no point bringing in good people if you don’t allow them the scope to shake things up.”
