He helped pioneer ‘cheap chic’ at Target in the 2000s. Can he do the same for Old Navy?

Old Navy, a division of Gap Inc., has received a new lifeline with the appointment of Michael Francis as its president and CEO. Francis, who recently joined Gap Inc. in March as chief customer officer and head of marketing shared services, will officially take over on November 2. Current CEO Haio Barbeito will step into an advisory role during this transition.

Gap Inc. president and CEO Richard Dickson expressed confidence in Francis, stating that he is "one of the most respected commercial, brand, and customer leaders in retail." Francis gained prominence in the early 2000s when he helped Target establish its "cheap chic" image, differentiating the retailer from low-priced competitors like Walmart and Kmart.

During his 26-year tenure at Target, Francis held positions such as executive vice president and chief marketing officer. Prior to Target, he spent 10 years at Walmart focusing on revenue growth. Now, Gap Inc. is hoping Francis can replicate his success at Old Navy, which has been struggling. The brand's net sales decreased by 4% year-over-year to $2.1 billion, attributed to expected pressure in the women's seasonal assortment and an unanticipated slowdown in foot traffic.

Meanwhile, Gap Inc.'s overall net sales increased by 9% YOY to $844 million, while its other brands, Banana Republic and Athleta, performed moderately. Shares of Gap Inc. rose more than 18% in premarket trading following the announcement. Despite this, the stock has faced challenges this year, with a decline of over 17% year-to-date.