Gap’s chief executive Glenn Murphy is retiring from the company and will be replaced by the retailer’s digital boss Art Peck.

Peck will become chief executive in early 2015 as Murphy steps down at the end of the financial year after seven years heading the retailer.

Gap first hired Peck in 2005 and since then he has worked in a number of brand, strategy and operational roles before working his way up to become president of the growth, innovation and digital division.

In his current role, Peck is responsible for creating the company’s omnichannel and digital strategies, while overseeing the development of the Athleta, Intermix and Piperlime brands.

Murphy said: “Gap is a formidable global fashion retailer with a strong foundation in place for long-term growth, therefore making this an appropriate inflection point for me to pass the baton to a leader who will take our portfolio of brands to even greater heights.

 “With consumer expectations rapidly evolving, Art is the right leader at the right time to build on our success and ensure a compelling experience for our customers across both our physical and digital channels.”

Changes at the top will also involve Bob Fisher becoming non-executive chairman of the board. Fisher has been involved with the retailer for 35 years and is the son of the company’s founders.

Gap claims it has delivered exceptional financial results since the end of 2007, with shareholders receiving a return of more than 160%.

Peck said: “Our success will be based upon presenting brand-right, emotional product to our customers, both in stores and online.”

News of the managerial changes come as the company experienced a “more challenging” September than it expected.

Net sales were up 1% year-on-year as solid performances from Old Navy and Banana Republic were offset by a 3% like-for-like sales decline at the Gap fascia.