Gap Turns to eToys Founder for Online Group
Toby Lenk rode famous dot-bomb eToys into the ground, but that hasn't deterred Gap (GPS) from hiring him.
The apparel retailer on Thursday announced that it has hired Lenk to head its online operations. Lenk formerly served as founder and chief executive officer of eToys, which closed its doors after filing for Chapter 11 bankruptcy two years ago.
"Toby's intimate knowledge of online retailing will be a tremendous asset as we leverage our growing online businesses to serve our customers and provide a seamless and integrated shopping experience with our stores," Gap CEO Paul Pressler said in a statement.
Lenk, who will report to Pressler, will oversee the e-commerce sites of Gap, Banana Republic and Old Navy, as well as the company's online distribution center.eToys was one of the most spectacular flame-outs of the dot-com bust. Once seen as a giant-killer, eToys successfully held off competitors such as Amazon.com (AMZN) and Toys 'R' Us (TOY) to become the leader in online toy sales in 1998 and 1999. But the company fell far short of revenue expectations in the fourth quarter of 2000, hastening its demise. By the end of that year, it had racked up an accumulated deficit of nearly $430 million in just over three years of operations. Under Lenk, eToys had the dubious distinction of posting net losses that were nearly as big or bigger then its total revenue in every year it operated as a public company. In its fiscal year ended March 31, 2000, its last full year of operation, the company's net loss ballooned to $189.6 million, or $1.78 a share, on $151 million in sales. After filing for bankruptcy, eToys sold its name, Web site, trademarks and inventory to KB Holdings, the parent company of KB Toys. Since the company shuttered its site, Lenk has focused on venture capital investing, Gap said. Lenk is replacing Michael Tucci, who resigned. Lenk, who worked for Walt Disney (DIS) from 1991 to 1996, is only the latest Disney expatriate to join Gap. Pressler, who became CEO in September, had worked for Disney for 15 years prior to joining the company. The company hired Byron Pollitt, another longtime Disney manager, as its chief financial officer in January.
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