Dive Brief:

• Gap Inc. on Thursday announced the appointment of Old Navy chief and company veteran Sonia Syngal as CEO, effective March 23. She will also join the Gap Inc. board, according to a company press release.

• She began at Gap Inc. in 2004, working her way up through various leadership and general management roles, including managing director of the Europe business, and senior vice president of the international division and international outlet division. Before taking Old Navy's CEO post, she was executive vice president of Gap Inc.'s global supply chain and product operations, per the release.

• Since taking the CEO role at Old Navy in 2016, Syngal led its growth from $7 billion to $8 billion in sales, expanded its North American presence to more than 1,200 stores, scaled its e-commerce site to the fourth largest U.S. apparel site and built "competitive omni-channel capabilities," the company said. 

Dive Insight:

Expectations are high as Syngal takes the reins at the struggling retailer, an unsurprising if welcome move.​ Upon Art Peck's abrupt ouster as CEO of Gap Inc. in November, some analysts speculated that the company's plan to spin off Old Navy would be called off, and floated Syngal's name as a possible replacement to lead the entire enterprise.

That was true despite the fact that Old Navy, a stalwart performer for the company in recent years, faltered throughout last year, a struggle that fueled analyst skepticism about the spinoff. Such speculation continued as the company finally did call off the separation two months later. But it was still searching for a chief executive at that time, even as it shook up its leadership ranks, including letting go Gap brand chief Neil Fiske.

"Naming Sonia Syngal chief executive officer should be viewed by most as a very positive move in the right direction," Ray Hartjen, marketing director of store analytics firm RetailNext, told Retail Dive in an email. "But, it will be paramount for her and the entire organization to take some highly visible steps in the right direction very soon. There won't be a long honeymoon period. In fact, it's probably already over. The pressure is already on, and it's only going to get heavier if current results persist."

Neil Saunders, Managing Director at GlobalData Retail, called the appointment "sound," citing Syngal's knowledge of the business, "great track record at Old Navy," and deep appreciation of Gap Inc.'s troubles.

"I think Syngal comes into this with her eyes open. She will be acutely aware of the issues with the Gap brand and will be keen to enhance performance," he told Retail Dive in an email. "If she follows the Old Navy playbook then we can expect Gap to become a more nimble business that is more reactive and receptive to trends and tries to inject that newness into ranges. That, in itself, will help."

But as Hartjen notes, she has quite a project in front of her. Overall, Gap Inc. sales remain robust — fiscal 2018 net sales reached $16.6 billion — and the company early this year said that its performance in 2019 was better than expected. The fourth quarter and full-year results are due out March 12. Still, while total company fiscal 2019 comparable sales and net sales are both expected to be at the higher end of its previous guidance, that means comps down mid-single digits and sales down low-single digits. The Gap brand in particular saw third quarter comps tumble 7%, same as the year before, and once-dependable Old Navy saw comps fall 4%, a disappointment after the year-ago 4% rise.

"Syngal oversaw growth early in her tenure at Old Navy, but those results are under threat of becoming ancient history fairly quickly," Hartjen noted, adding that a strategic pivot is needed in light of the increasingly weak results at the company's biggest divisions. 

He believes her background in supply chain will be helpful in addressing operational inefficiencies that Robert Fisher, a son of the founder who was Gap Inc. interim CEO until now, said were revealed as the company pursued a separation. But she must "guide the brands — all the brands —​ back to relevance with shoppers, and that starts with product and a clear value proposition for shoppers," Hartjen said. "It's something the brand was built on, and she and her team need to rediscover that brand magic."

Saunders agrees, and warns that Gap is no Old Navy, nor should it be. "Gap is more complex than Old Navy," he said. "The customer demographic is wider. The brand is fairly tarnished. Some of the merchandising changes needed are subtle. And a new position and brand essence is needed. So, there are no easy or quick fixes and Syngal will have her work cut out."

Indeed, Syngal's success at Old Navy could be a pitfall if she hews too closely to what worked at the discount brand. "What's most important is that Gap doesn't simply become an Old Navy variant," Saunders said. "It can learn from Old Navy, but it must not become Old Navy."

In its announcement Thursday, Gap Inc. also said it has tapped new board members, addressing a weakness cited by B. Riley analyst Susan Anderson​ earlier this year. Along with the addition of Syngal, Bobby Martin, a member of the board since 2002, will be executive chairman effective March 23. And on April 1, joining the board will be Elizabeth Smith, previously CEO of Bloomin' Brands and an executive at Avon Products and Kraft Foods, and Amy Miles, CEO of Regal Entertainment Group from 2009 to 2018.