Gap Inc. named Mattel Inc. Chief Operating Officer Richard Dickson as its next chief executive officer, ending a lengthy search process as the apparel retailer contends with sinking sales and a more conscientious consumer.
Dickson, 55 years old and also a co-president at the toymaker, will leave Mattel on Aug. 3 and take over at Gap on Aug. 22, the companies said in statements Wednesday. He’s been a member of Gap’s board since November.
Gap shares rose 6.2% in premarket trading. Mattel dipped 1.3%.
Former CEO Sonia Syngal was ousted a year ago following a series of missteps, including a plan for the Old Navy brand to offer more inclusive sizing that resulted in a glut of inventory of products that didn’t sell. Chairman Bobby Martin had been serving as interim CEO.
Three of Gap’s last four chiefs — including Syngal — were chosen from the inside, but analysts and former employees had said before the appointment of Dickson that the company would benefit from an external hire.
Dickson will have to lead Gap in a retail environment that’s becoming increasingly troubled as consumers grapple with financial uncertainties including the end of student-loan forbearance. The retailer reported in May that comparable sales fell by 3% in the first quarter, reflecting large declines at the Banana Republic and Athleta brands.
Dickson is often credited with turning around the Barbie brand when he rejoined Mattel in 2014. With a background in marketing, the executive shifted course and pushed to make the doll more inclusive and relevant.
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That played out in multiple ways, including releasing Barbies with different skin tones and body types. Dickson also changed advertising to pitch the doll directly to parents as a way for girls to boost their confidence and aspirations through Barbie’s open-ended play.
What Bloomberg Intelligence Says
“Gap’s turnaround prospects just got better with the naming of Richard Dickson as its new chief executive officer, having demonstrated the revitalization of Mattel’s Barbie franchise.... Dickson, who already sits on Gap’s board, has apparel experience from stints at Bloomingdale’s and Nine West.”
— Mary Ross Gilbert, senior retail analyst
Click here to read the research.
Dickson’s strategy worked as Barbie’s sales eventually rebounded and again topped $1 billion in annual revenue.
“His reinvention of the Barbie franchise, which is currently riding on a high, is also proof that he understands how to turn around established brands that have run out of energy and steam,” Neil Saunders, an analyst at GlobalData, said in a note. “This is exactly the challenge he will need to address at Gap.”
Last August, Gap pulled its full-year guidance, citing macroeconomic uncertainty and the search for a new chief. A month later, the company cut 500 corporate jobs in an effort to lower costs, which was followed by an additional 1,800 cuts in April. And the company’s partnership with Ye, which was expected to last 10 years, came to an abrupt end in September after a public spat between the two parties.
Gap, which was founded in 1969 in San Francisco, owns its namesake brand and Old Navy in addition to the higher-end Banana Republic and athleisure brand Athleta.