October 02, 2009
Sabrina Simmons (’90) Sees Opportunity for GAP, Inc. During the Recession
By Paul Feinberg
For shoppers, Gap seems as ubiquitous as, well, blue jeans themselves.
Gap Inc. operates 3,100 Gap, Banana Republic and Old Navy stores in North America, Canada, the United Kingdom, Ireland, France and Japan. There are another 100 Gap and Banana Republic stores franchised internationally and the company also runs two online brands, Piperlime and Athleta. And in spite of the recent worldwide economic turmoil, the 40-year-old company netted $14.5 billion dollars in its 2008 fiscal year and has about $2 billion in cash on its balance sheet.
Sabrina Simmons ('90) is Gap Inc.'s executive vice president and chief financial officer. She works with chairman and CEO Glenn Murphy to steer a leadership team that includes eight separate operating divisions, each with its own president. As corporate CFO, her role is to manage the portfolio, challenging each brand to drive better results for company shareholders and to allocate capital efficiently, deciding where to invest based on performance and potential.
"One of my most important and most challenging responsibilities is to continually communicate to our employees and our shareholders where we as a company are headed," Simmons explained. "(We try to communicate) what our vision is for the long-term and how we are balancing short-term goals. As a publicly traded company, we look for short term success, but it is critical that we never lose sight of driving the long-term health of our business. Communicating that clearly and keeping everyone aligned is a really important part of my job and one I underestimated. I didn't realize before how vital communication is every day."
Simmons began honing her communication skills at UCLA Anderson. "It's really critical to have a strong academic foundation to succeed and move upward over time," she said. "It's the entry ticket. (In graduate business school) you start to learn the key leadership and communication skills." Simmons earned an undergraduate business degree from Berkeley's Haas School, but notes that the added maturity she brought to her Anderson MBA experience after working for a few years was essential.
"Learning as a student is so much richer when you see how things work in the corporate world. A lot of light bulbs went on for me in (graduate) business school," she said. "Overtime you may forget technical things, but learning how to learn, how to work in teams, which you do more in business school, lays the critical groundwork for what lies ahead in the business world."
For Simmons, over the past few years, that world has included a consumer-led recession that's taken its toll on the nation's retail sector. But she says Gap Inc. views the recession as a "great opportunity."
"We've lost market share over the last few years," Simmons said. "But even in this environment, the company has had healthy earnings. Our biggest goal right now is to regain market share. We see lots of silver linings in this recession in terms of using our leverage and size with some of our partners, such as real estate landlords and merchandise vendors. Also, some of our competitors are relatively weaker as their balance sheets may not be as strong as ours. Gap Inc.'s relative strength has allowed us to invest in marketing in North America and international growth opportunities. Since I've been here, we've managed our balance sheet carefully and have built large cash reserves that we can now use to our advantage."
Gap Inc.'s diverse set of brands is another advantage. Simmons says that each brand delivers a different value to the company's customers. Banana Republic, for example, offers value to a target audience of young urban professionals. But it's Old Navy that is Gap Inc.'s value brand.
"We have been especially focused on driving Old Navy, our value brand, forward during the recession," Simmons said, noting the marketing dollars behind the popular "Supermodelquins" television commercials. "(It) is playing to what the company is going for. We're trying to offer great value for shoppers with strategic promotions and when we plan properly, we can achieve profits in a win-win situation for customers and the company."
Simmons joined Gap Inc. in 2001 as vice-president and treasurer. She held numerous positions, ultimately rising to CFO in January 2008. Previously, she served as chief financial officer and executive member of the Board of Directors at Sygen International PLC, a British genetics company. Before that, she spent five years at Levi Strauss & Co.Contact Information
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