Wall Street never loves it when a publicly traded company parts ways with a chief financial officer. But when a struggling apparel retailer gives its top numbers cruncher the old heave-hoe before the start of the crucial holiday shopping season, it really sends up red flags as to what could be ahead.
Gap (GPS) on Wednesday announced that CFO Sabrina Simmons would depart in January, the end of the retailer's fiscal year. Simmons has held the top finance post since 2007, and has been with Gap dating back to 2001 when apparel design wizard and current J. Crew CEO Mickey Drexler was Gap's chief. Gap's founder, Donald Fisher, was chairman.
"Since I assumed the CEO role two years ago, Sabrina has been an instrumental partner in helping the company transition to a new leadership team. With that period of transition behind us, Sabrina and I agreed that this was an appropriate time for a change in the organization and for her to pursue the next chapter in her career," Gap's CEO Art Peck said in a statement.
Simmons' departure -- a mere weeks before the Black Friday shopping frenzy begins -- could signal several things. First, it's unlikely Gap will extract itself from a dreadful run of sales this holiday season. After all, why push out a veteran CFO if the company has the prospect of sharing great holiday numbers early next year?
The apparel retailer's same-store sales in September fell 3%, the ninth month of slower sales out of the last 10. Wall Street was banking on a 3.6% decline. The relatively in-line sales number for Gap -- driven mostly by a 4% same-store increase at the value-oriented Old Navy chain -- masked worrying declines at the Gap and Banana Republic divisions.