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Old Navy's Captain Leaves Gap

Dawn Robertson steps down by mutual agreement with the company.
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SAN FRANCISCO -- The president of

Gap's

(GPS) - Get Gap, Inc. (GPS) Report

largest -- and most troubled -- division is stepping down after just over a year in the position.

Dawn Robertson, 52, resigned as president of the Old Navy brand, effective immediately, Gap said Tuesday. The retailer called the move a "mutual decision" between Robertson and the company.

Robertson had headed the discount chain since November of 2006, but never quite found her footing in the division, which at one point had been the company's most successful but lately has been struggling to compete against other low-priced apparel sellers.

Tom Wyatt, president of Gap Outlet division, will take over as interim president of Old Navy until a permanent replacement is named. Wyatt, 52, joined the company in 2006 as a senior executive of the Gap brand before leading the outlet division for more than a year. He had previously led a chain of department stores operated by

Saks

(SKS)

, and also served as chief executive of the Cutter & Buck clothing company.

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"We're fortunate to have someone of Tom Wyatt's caliber and experience, as both a president of our Outlet division and a former retail CEO, to guide Old Navy during this transition," said Glenn Murphy, who took over as Gap's CEO last August.

Mark Montagna, an analyst for CL King and Associates, said he expects Wyatt to eventually become Old Navy's permanent president.

"We believe Glenn Murphy would not have appointed him to this interim role if he did not foresee him as the eventual leader of the division," Montagna wrote in his latest research. "Glenn has had about six months to assess Tom Wyatt's skills."

While he credited Robertson for improving inventory management, reducing product development cycle times, and cleaning up stores, Montagna noted that Old Navy still lagged behind the Gap division, which too has been struggling but nonetheless has been making some noticeable gains. Old Navy, on the other hand, has yet to recover from stiff competition by chains like

Target

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, which has been able to win over customers both on fashion and price.

"The lack of satisfactory improvement led to above-plan markdowns at Old Navy," Montagna wrote. "The women's knits and bottoms continue to lag expectations. While Dawn brought improvements to these areas, we expect Tom Wyatt will improve these and other areas further."

Robertson had been among the last remnants of the Paul Pressler era. Pressler, who appointed Robertson as Old Navy's president, had served as Gap's CEO for four years before stepping down in January of last year.

Since Pressler's departure, the company has also named new heads of the Gap and Banana Republic divisions.

Shares of Gap fell 47 cents, or 2.4%, to $19.23 Tuesday.