Gap Inc.'s CEO, Outspoken Marketing Critic, Steps Down

Art Peck To Replace Glenn Murphy Next Year

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Gap's recent 'Dress Normal' campaign.
Gap's recent 'Dress Normal' campaign.
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Gap Inc. CEO Glenn Murphy, who has been outspoken when it comes to the company's marketing efforts, will step down next year.

The company said Mr. Murphy will be passing the reins to one of his lieutenants, Art Peck, on Feb. 1. Mr. Peck currently serves as president of growth, innovation and digital operations. As part of the transition, Bob Fisher, the son of Gap's founders, will become non-executive chairman of the board. Mr. Murphy had served as CEO and chairman for more than seven years.

Mr. Murphy, who joined the company in 2007, has been unusually candid on the topic of marketing over the years, often airing his thoughts on specific campaigns and approaches during the company's quarterly earnings calls with analysts.

Glenn Murphy
Glenn Murphy

During one call, in 2011, he criticized the company's ad offering as "ineffective." He told analysts that Old Navy's marketing, specifically, "did not pull, did not drive traffic as much as we wanted," adding that he was disappointed with the brand and the leadership.

A few years before that, with several of Gap Inc.'s brands floundering, Mr. Murphy spelled out the four criteria brands must meet to justify marketing spending. The brands must have good product, well-run retail environments and an "imaginative, creative" message for the target consumer. The fourth criterion, he said, answers the questions: "Is the consumer ready to respond to the marketing? What is the psyche of the consumer? How are they feeling at that moment?"

It was Mr. Murphy's focus on marketing, in part, that landed Gap Inc. on Ad Age's Marketer A-List in 2013. Global expansion and the rapid creation of strong global marketing teams fueled growth, while Gap Inc.'s brands benefited from fresh marketing talent and advertising investments. That year, Gap Inc. also rounded out its trio of global chief marketing officer positions, adding Ivan Wicksteed at Old Navy and Catherine Sadler at Banana Republic. Seth Farbman took on that role at Gap in 2011.

Mr. Peck will work to increase the company's digital sales at a time when mall traffic shrinks and shoppers are increasingly going online for deals. Gap's total sales at stores open at least a year -- including online purchases -- were little changed in September compared with the same period a year earlier, the company said in a separate statement today.

"This is a planned and orderly process, and there's a lot of continuity that's going to come out of it," Mr. Peck said in an interview. "We feel we have a very well articulated strategy that's delivering a lot of value and we're a long way from being complete on. I'm committed to following that through."

Mr. Murphy added, "I really do believe the best years are ahead of Gap with the foundations of the business in place." He added that he has no plans for where he'll go after the transition.

--With contributions from Bloomberg News