Gap Inc. reported Athleta’s sales fell 11 percent in the first quarter to $321 million due to “continued product acceptance challenges.” On an analyst call, Gap officials said Julia Leach has been hired as its new chief creative officer to help revive assortments.
Leach was most recently chief brand officer at La DoubleJ, the Milan-based trendy women’s fashion brand from November 2021 to May 2023. She is the co-founder of Sublime, a strategic brand studio based in Los Angeles, and also co-founded Chance, a lifestyle brand also based in Los Angeles. She held the chief customer officer role at Beautycounter and has consulted with Apple, Ralph Lauren, GAP, Old Navy, and J Brand.
The hiring comes as Mary Beth Laughton, Athleta’s president, stepped down in March due to continued product missteps and a search for a successor continues. Laughton had led the Athleta business since October 2019.
Gap has blamed Athleta’s recent softness on a general slowdown in athleisure following a spike in the earlier stages of the pandemic, but also said the brand has seen some product misteps.
Comparable-store sales at Athleta in the first quarter were down 13 percent. In 2022, Athleta’s comparable-store sales were down 5 percent, including a decline of 4 percent in the fourth quarter.
Bobby Martin, Gap Inc.’s CEO, said on an analyst call, that Athleta’s first-quarter results were below expectations.
“As we discussed last quarter, Athleta’s near-term performance was negatively impacted by continued product acceptance challenges, including color, print, and pattern misses and from straying too far from its performance DNA,” said Martin. “Delivering the best product for our customers is the highest priority, and while the team is focused on making improvements in the assortment, we know it will take time for those changes to fully take hold.”
He added, “While we continue our search for a new leader for Athleta, we are leveraging the great talent currently at the brand, including our new chief creative officer, Julia Leach, as well as some of our best merchandising and product talent from across our portfolio of brands. Collectively, they are leaning in and making improvements where we can, including better presentation of the product that is working, and elevating our marketing and creative expression.”
Athleta ended the quarter with 259 locations, opening two stores and closing one during the period.
In recent years, Gap set a goal for Athleta to reach $2 billion in sales in the current fiscal year. Sales in 2022 advanced 2.2 percent in 2022 to $1.48 billion from $1.45 billion a year ago.
In the Q&A session, Martin stressed that Athleta remains a growth engine alongside Old Navy for the company.
“It’s just really clear that we walked away a little bit too far from our performance DNA,” said Martin. “Definitely had some misses in and around product specifics, silhouettes, color, and even just some of the styling, etc. And that really, again, gave us a big challenge relative to that customer, what she’s coming in for. Although our bottoms continue to be really strong, we have to be able to capitalize on a lot more than that.”
He added, “And everything that that brand stands for, for that customer, we’re not backing down from at all. The ‘Power of She,’ the emotion in the brand, performance, why we are moving to get in more aggressively in running, yoga, some of those areas that we know have been real big misses for us. It’s what that team right now is really focused on. And as we commented in our remarks, I’m really pleased right now how the current team is making the most, if you will, out of everything we have that the customer is really resonating with. And we look forward to seeing that brand find its stride again.”
Photo courtesy Athleta