Old Navy is replacing its chief executive following repeated quarterly sales misses. Michael Francis, who arrived at Gap Inc. in March as chief customer officer, will take over from Haio Barbeito, who moves to an advisory role after four years—signaling growing urgency at what was once the company's most reliable performer.
Old Navy's Q2 results extended a troubling trend. Retail Dive reported that net sales fell 4% to $2.1 billion, with comparable sales also down 4% amid an 'unanticipated slowdown in traffic.' Yet other sibling brands outperformed. Gap brand net sales actually rose 9% to $844 million with comparable sales surging 10%, while Banana Republic also gained ground.
The timing suggests deeper trouble than leadership acknowledged. Executives blamed modest merchandising issues, but the CEO departure signals more fundamental challenges.
The leadership transition reflects analyst concerns about deeper problems. According to Retail Dive, GlobalData's Neil Saunders said Old Navy 'did not give them enough reasons to buy,' even as its target demographic faces pressure; he cited the Gap brand's resurgence, fueled by cultural collaborations and improved core products in denim and fleece, as evidence of what sustained growth requires.