Art Peck will leave his post helming the clothing company, as well as its board "after a brief transition, " Gap said in a statement Thursday.
Gap's board of directors issued a statement saying Peck will vacate the positions and his seat on the board.
Peck, who has been at the company for almost 15 years and has served as CEO since 2015, will be replaced after a brief transition by interim chief executive Robert Fisher, a son of the Gap's founders and now the company's non-executive board chairman. In February, when the split was announced, company officials said they meant to shutter roughly 200 Gap stores over the next three years. Other Gap brands, including Banana Republic and Old Navy, also saw global sales declines of 3 percent and 4 percent, respectively.
The company's stock tumbled 7% to $16.75 in after-hours trading following the announcement.
The news comes as the company is in the midst of splitting into two publicly traded companies, one for its Old Navy brand and another for the Gap, Banana Republic and its lesser known brands.
Old Navy, which has been a strong performer for Gap is being spun off into its own public company next year.
Like many mall-based clothing chains, Gap is struggling to turn itself around as shoppers go online or to discounters like T.J. Maxx for their clothing.
Now, it's turning to new ways to grab customers.
The apparel retailer, which estimated a 4% drop in third-quarter same-store sales, now expects full-year adjusted earnings per share of $1.70 to $1.75, down from its previous forecast of $2.05 to $2.15.