Only six years ago, Gap Inc was telling investors that its Athleta yoga clothing brand was on its way to becoming a $2 billion-a-year brand as it attracted legions of fans drawn to its high quality, hip activewear that was less expensive than that of Lululemon Athletica.
But that was two CEOs ago. Gap Inc, which also owns Old Navy and Banana Republic, said on Tuesday that it was replacing Athleta CEO Chris Blakeslee, tapping Maggie Gauger, a 20-year veteran of Nike, to try her hand at re-invigorating a brand that had once been seen as a key motor for Gap Inc’s growth despite being smaller than its sister brands. The once high-flying brand has faltered since sales peaked at $1.45 billion four years ago. Last year, the business’s sales came in at $1.353 billion, roughly on par with the year before, and then declined sharply in the first quarter of the current fiscal year.
Gauger’s appointment marks a return to having a woman CEO at the helm of a brand known for its “Power of She” slogan and being a label for women and girls and empowering them in the world of sports. “Maggie blends proven business transformation capabilities, deep consumer centricity, product fluency, and a heartfelt commitment to empowering women and girls,” said Gap Inc CEO Richard Dickson, who has been leading a company wide turnaround for two years now, in a statement.
When Blakeslee’s appointment, made before Dickson became chief executive, was announced exactly two years ago, there was palpable excitement and the perception that landing him was a coup. After all, Blakeslee had come from Athleta rival Alo Yoga and Bella+Canvas, where he had doubled sales to $1 billion in just a few years. What’s more, Alo was, and still is, generating a ton of buzz and challenging the supremacy of long time category leaders like Lululemon.
But Blakeslee, who had inherited a brand dealing with a spate of product flops and an athleisure-wear trend that was peaking, was unable to generate the same heat at Athleta. (He replaced Mary Beth Laughton, now CEO of REI, in 2023 a few months after she left in the wake of what Gap Inc’s former interim CEO Bob Martin called ongoing “product acceptance challenges.”)
After stanching the bleeding in 2024, Athleta’s declines resumed this year. The 8% drop in comparable sales in the first quarter reported in May at Athleta may well have sealed Blakeslee’s fate. “Work is being done to reset the brand and improve product and marketing which will take time,” Gap Inc said tersely in its earnings report in May.
So it will be up to Gauger, whose last job at Nike was leading its North America women’s business, to address slow innovation, to renew a focus on the performance aspect of its clothing that had become more focused on chasing fashion trends, alienating long time loyalists in the process, and make clearer to consumers how Athleta is different in a very crowded segment in North American where even Lululemon has seen growth cool.
At Nike, Gauger focused on generating growth and customer loyalty for Nike’s active and athleisure products. “I’m energized to bring my experience working at the intersection of sport, style and culture to Athleta, a brand with strong purpose and still so much untapped potential,” said Maggie Gauger.
Since Dickson’s arrival, Gap’s namesake brand and Old Navy have seen their fortunes improve, helped by a quicker cadence of innovation and a bigger effort to connect the brands to the broader culture. So it’s not surprising that Dickson would want someone of his choosing to do the same for the Athleta brand.