Gap boss departs after poor sales

Gap needs a new boss to turnaround its fortunes

Clothing giant Gap has parted company with its chief executive Paul Pressler by mutual agreement after more than two years of falling sales.

Mr Pressler, 50, who has led the US retailer since 2002, is now due to pocket a $14m (£7m) severance package.

The move has led to speculation that Gap, which also owns the Old Navy and Banana Republic chains, may sell off parts of the business.

Gap has not seen a rise in group-wide quarterly same-store sales since 2004.

The announcement of Mr Pressler's departure saw shares in the firm rise 2.5% in after-hours trading in New York.

Gap's stock has fallen by 62% since 2000.

Family involvement

The firm said in a statement that Mr Pressler, who joined the firm from Walt Disney, will be temporarily replaced by Gap's non-executive director Robert Fisher.

Mr Fisher, 52, is the son of Gap's founder, and the Fisher family maintains a 37% stake in the firm.

There really aren't that many people around that have managed businesses the size of Gap Marie Driscoll, Standard & Poor's See Gap's shares

Speculation that the company may be looking at a possible sale of either the whole group or part of its business has been growing since Gap recently hired investment bank Goldman Sachs to evaluate its operations.

Hiring such a bank to study a firm is often a precursor to a sale.

However, analyst Shawn Kravetz of Esplanade Capital said it would be more likely for Gap to try and turn itself around.

Fellow commentator, Standard & Poor's retail analyst Marie Driscoll, said Gap may struggle to find a suitable replacement for Mr Pressler.

"There really aren't that many people around that have managed businesses the size of Gap," said Ms Driscoll.

Gap has more than 3,000 worldwide stores.

Analysts said its woes stem from uninspired design and increased competition from low-cost rivals, such as supermarkets.