Things haven’t been great for The Gap (NYSE:GPS) in recent years. Assaulted on all sides by changing trends in fashion and retail, it’s been rough all around. However, there’s new hope, as the man credited with bringing back Barbie has just made the leap into becoming The Gap’s new CEO. Investors responded with wild applause, sending shares up nearly 8% at one point in Wednesday afternoon’s trading.
The new CEO, Richard Dickson, recently served as president and chief operating officer of Mattel (NYSE:MAT). Indeed, Dickson is frequently cited as the man who gave Barbie a whole new life, as noted by the impressive performance of the movie of the same subject that recently opened. Jefferies in particular offered plaudits, noting that Dickson is a “…seasoned C-suite executive…” and also one with “…prior experience in reinvigorating multiple brands….”
Some, however, are more skeptical. Bloomberg’s Leticia Miranda pointed out that Dickson is the seventh person to take the top slot at The Gap in the last 20 years. Referring to Dickson’s appointment as part of a “…perennial turnaround effort…,” Miranda noted investors would likely look for “…more of the same.” However, there are two critical points to consider; first, as noted, Dickson has experience staging turnarounds in environments such as these. And while Dickson likely won’t be able to get much interest in a movie like “Cargo Pants” or something similar The Gap sells, he will have a notable tailwind on his side: a sudden resurgence in vintage Gap clothes. The Guardian reported that “vintage Gap” searches are up 114% just in June on Depop.
Analysts, however, are still largely split. With three Buy ratings, five Hold and one Sell, The Gap stock stands as a Hold by analyst consensus. Further, with an average price target of $11.06, The Gap stock offers investors an 11.49% upside potential.
