Gap bids on global management for profitability

Gap Inc. chairman and CEO Glenn Murphy announced earlier this week the company’s strong bid for a new global brand management structure. Under the new management, Gap, Banana Republic and Old Navy brands will each be

led by a single executive with global purview beginning in fiscal year 2013.

“Our strong performance gives us the confidence to make this move to bring each brand together with the goal of gaining market share around the world and enhancing shareholder value,” stated Glenn Murphy. “The global teams will move even faster in anticipating and responding to the ever-evolving needs of customers, delivering consistently great product around the world.”

Thanks to this strategic twist, the apparel retailer, which has more than 3,200 stores, will bring together its North American, international, online, outlet and franchise divisions under its main brands in an effort to improve market share. The company also plans to form an innovation and digital strategy team, reported ‘Nasdaq’.

As the own company explained the new "global" positions have been given to veteran Gap executives. The company would be following the path of other apparel retailers, like Abercrombie & Fitch Co. (ANF). But the road is a tricky one, warned ‘Nasdaq’, especially right now due to economic conditions around the globe. Gap would do well to take a steady-as-she-goes approach, analysts said, reported the Wall Street publication.

Gap North America president Art Peck, “will build upon the company’s leadership position in e-commerce and oversee further investments to provide our portfolio of brands with world-class digital capabilities and expertise. He will also guide the development and growth of the Athleta and Piperlime brands,” the company revealed in a note issued earlier this week.

Banana Republic's president for North America, Jack Calhoun, will be now in charge of the brand’s global plans. At Old Navy, Stefan Larsson, a 15-year veteran of Swedish retailer H&M started earlier this month as global president. Murphy himself will oversee the Gap Inc. brands' expansion in China, a priority for the retailer as it firms up its position on the global runway, published Bloomberg.

Exiting the company in February 2013, is Toby Lenk, president of online, to return to his entrepreneurial roots after delivering $2 billion in sales ahead of his division’s 2014 goal.

Gap's business has finally been back to green, when the company reported in August a 29 percent increase in second-quarter net income and raised its full-year profit guidance for the second time since May.