Gap Looks For New CEO

123jump.com Staff
22 Jan, 2007
New York City

Gap Inc reported that its board has agreed to replace its current CEO and President Paul Pressler. Gap has struggled during the last four years of his tenure to reignite its several brands and kick-start sales growth. Investors and customers have not been impressed with results. The competitive casual apparel market has shifted its focus from streamlined unisex looks to more tailored and multi color outlooks.

Gap Inc board reported that its current CEO and President Paul Pressler will resign effective immediately. Mr. Pressler will also give up his board meeting.

Gap has been losing market share to other teenage retailers and discount store chains for a decade. For the last three years the company has tried to redefine its strategic outlook and reposition its product portfolio but market has not responded favorably.

During his tenure of four years and four months the company has steadily lost market share and the company stock has come under heavy pressure. The stock has traded between $12 and $25 during the years of Mr. Pressler in office.

Company’s once distinct style and fashion has been widely copied by its competitors. At the same time Gap has not been able to attract new customers to its stores. The wheel of fashion has been vicious to many large retailers in the past and Gap is the recent victim of markets preference of ethnic look, multi-color styles and accessorized out fits. Gap offers none of these looks to its customers.

The company also said that Mr. Pressler is eligible for a severance pay of $14 million when stock options value is added to the cash payments.

The Gap ((GPS)) stock fell only one cent on the news in the after hours trading to $19.89.

Robert J. Fisher, will serve as interim CEO and President while company searches for replacement. Mr. Fisher is the current non-executive chairman of board of directors.