Gap boss sacked after Christmas misery

Clothing giant Gap has dumped chief executive Paul Pressler after a year of broken promises that culminated in a dismal Christmas shopping season.

Pressler, Gap’s CEO since September 2002, will receive a severance package valued at €11.2m as he walks away from the disarray that has dragged down one of America’s largest merchants.

The San Francisco-based company, which owns 3,100 stores under the Gap, Old Navy and Banana Republic brands, has been struggling since the spring of 2004.

As it became increasingly apparent that things were not improving, more investors became convinced Pressler would be ousted.

In a statement, Gap said its board and Pressler “mutually agreed” it was time for him to leave.

“This was a long time coming,” said retail industry analyst Jennifer Black. “They need to bring in a visionary, an incredibly talented merchant who can see quite a ways into the future.”

Gap named Robert Fisher, the son of founder Donald Fisher, as CEO on an interim basis. The younger Fisher has previously held several top jobs at Gap and has been the company’s non-executive chairman since May 2004, when he stepped into his father’s shoes.

The elderly Fisher, Gap’s largest shareholder, remains chairman emeritus and will participate in the search for a new CEO.

After Gap’s Christmas letdown, more investors began to bet that the company would be sold to a deep-pocketed buyout firm interested in engineering a turnaround.

The speculation intensified earlier this month amid reports that Gap had hired investment firm Goldman Sachs to explore “strategic alternatives”, financial jargon often used when companies are about to throw out a “for sale” sign.

The shake-up could signal Gap’s intention to remain independent. Given Gap’s problems and an estimated €16bn sale price, several analysts doubt the company’s ability to attract a buyer.

In a statement yesterday, Robert Fisher made it sound as if Gap would try to solve its problems on its own.

“During this important transition period for our company, the board of directors and I are committed to working with our employees to enhance our focus on … reinvigorating our brands and charting a new course for the future that will deliver strong returns for our shareholders,” he said.

The Fishers hold the key to any possible sale because they own more than 25% of the company’s stock.