But even the highest projection for Spade's sales is dwarfed by Banana Republic's size. When Lloyd joined the Gap division in 2001, sales were $1.9 billion and they have grown steadily since to $2.5 billion last year. With more than 500 stores in the U.S., Banana Republic represents 15 percent of Gap Inc.'s $15.9 billion in sales. Like its parent company, Banana Republic has ridden ups and downs in the past few years, but the smaller, higher-end line has fared better than the Gap and Old Navy divisions.

"Banana Republic is a strong brand with a great heritage — and I'm excited to build on the success of our base business while tapping the brand's strong potential by expanding into new categories," said Jack Calhoun, president of Banana Republic, in a statement. "Deborah has made many important contributions, including leading Banana Republic's talented and tenured team of designers. I've personally enjoyed working with Deborah for the past four years, and speak for our entire team when I wish her well in the future."

Both Lloyd and her as-yet-unnamed co-president will chair Spade's advisory board, which includes the Spades, McComb and executive vice president of Claiborne's direct-to-consumer division Jill Granoff.

Lloyd will report to McComb and be based in New York.