Figured this was the best spot to put this, seeing as he hasn't been with the company in a while, but interesting nonetheless.
http://news.yahoo.com/s/nm/20070123/bs_nm/gap_dc_4
Gap CEO Paul Pressler steps down
LOS ANGELES (Reuters) - Gap Inc. Chief Executive Paul Pressler resigned from the retailer on Monday after more than two years of weak sales and a failed attempt to revive the struggling clothing brand.
The move sent its flagging shares up 2.5 percent after hours. Investors and analysts said the largest apparel retailer in the world could sell itself to another company or unload some pieces.
Nonexecutive chairman Robert Fisher, 52, the son of the company's founder, will serve as interim CEO.
Earlier this month, the company, which popularized the T-shirt and khakis look, said its executive team and board would review brand strategies at its two largest divisions -- Gap and family-oriented Old Navy -- which have lost market share and foot traffic to rival retailers.
San Francisco-based Gap also recently hired investment bank Goldman Sachs Group Inc., increasing speculation that the company could be for sale. The Fisher family and its limited partnership owns 37 percent of Gap stock.
"The stock is pricing in either a very solid turnaround or a sale of the company," said Shawn Kravetz, president of Esplanade Capital. "The former is a lot of work, and the latter is not likely to happen."
He added that investors should not expect a quick fix.
"Given the lead time on new seasons, new collections, etcetera, any reasonable person would want to give that CEO a year to start seeing some results. For a true bona fide turnaround, that would take at least a year under the best leadership," he said.
Pressler, 50, was hired in late 2002 after 15 years at Walt Disney Co.. He was charged with turning around a three-year string of mostly negative sales at established stores. Same-store sales at Gap turned positive in 2003, but were negative for six months of 2004.
Since 2005, same-store sales have dropped in all but two months.
Many retail watchers have questioned whether Pressler was the right person to lead the company since he lacked extensive retail and merchandising experience. Gap said Monday the board would prefer a new CEO with "deep retailing and merchandising experience ideally in apparel."
During his tenure, Pressler reduced debt, improved inventory controls, closed underperforming stores and added technology to back up operations at its more than 3,000 worldwide stores.
While Pressler oversaw a successful turnaround at Gap's upscale Banana Republic chain, he was criticized for a new online shoe Web site, Piperlime, and a chain of stores for women above 35 called Forth & Towne, as store traffic fell at Gap and Old Navy.
Pressler, who will also leave the board, is eligible for up to $14 million in severance, assuming a stock price of $20 per share, Gap said.
Gap stock rose to $20.40 in extended trade after closing on the New York Stock Exchange at $19.90, down 10 cents on the New York Stock Exchange.
FALLING FLAT
At Gap, shoppers have turned away from what critics described as uninspired fashions. Attempts to introduce trendier, more fashionable items such as skinny black pants to younger customers also have fallen flat.
Old Navy, which sells cheaper apparel for the entire family, has stores in need of a make-over and has seen market share erode amid fierce competition for basics from retailers from Target Corp. to Kohl's Corp..
Wall Street and the retail industry is now wondering who will follow Pressler. The candidate pool is limited, given the qualifications needed to run a company the size of Gap, which operates more than 3,100 stores under the various brands.
Other companies, such as Home Depot Inc., have also struggled with CEOs who lacked substantial retail experience.
"There really aren't that many people around that have managed businesses the size of the Gap," said Standard & Poor's analyst Marie Driscoll.
Despite internal problems, Gap shares rose 10 percent in 2006, helped by share buybacks. But at the end of 2006, the stock traded 7 percent below January 2005 levels.
Shares of Gap have been trading at 23.5 times estimated fiscal 2007 earnings, a slight premium to Chico's FAS Inc., which trades at a forward price-earnings ratio of 21.5, and solidly ahead of Limited Brands Inc. at 16.9.
http://news.yahoo.com/s/nm/20070123/bs_nm/gap_dc_4
Gap CEO Paul Pressler steps down
LOS ANGELES (Reuters) - Gap Inc. Chief Executive Paul Pressler resigned from the retailer on Monday after more than two years of weak sales and a failed attempt to revive the struggling clothing brand.
The move sent its flagging shares up 2.5 percent after hours. Investors and analysts said the largest apparel retailer in the world could sell itself to another company or unload some pieces.
Nonexecutive chairman Robert Fisher, 52, the son of the company's founder, will serve as interim CEO.
Earlier this month, the company, which popularized the T-shirt and khakis look, said its executive team and board would review brand strategies at its two largest divisions -- Gap and family-oriented Old Navy -- which have lost market share and foot traffic to rival retailers.
San Francisco-based Gap also recently hired investment bank Goldman Sachs Group Inc., increasing speculation that the company could be for sale. The Fisher family and its limited partnership owns 37 percent of Gap stock.
"The stock is pricing in either a very solid turnaround or a sale of the company," said Shawn Kravetz, president of Esplanade Capital. "The former is a lot of work, and the latter is not likely to happen."
He added that investors should not expect a quick fix.
"Given the lead time on new seasons, new collections, etcetera, any reasonable person would want to give that CEO a year to start seeing some results. For a true bona fide turnaround, that would take at least a year under the best leadership," he said.
Pressler, 50, was hired in late 2002 after 15 years at Walt Disney Co.. He was charged with turning around a three-year string of mostly negative sales at established stores. Same-store sales at Gap turned positive in 2003, but were negative for six months of 2004.
Since 2005, same-store sales have dropped in all but two months.
Many retail watchers have questioned whether Pressler was the right person to lead the company since he lacked extensive retail and merchandising experience. Gap said Monday the board would prefer a new CEO with "deep retailing and merchandising experience ideally in apparel."
During his tenure, Pressler reduced debt, improved inventory controls, closed underperforming stores and added technology to back up operations at its more than 3,000 worldwide stores.
While Pressler oversaw a successful turnaround at Gap's upscale Banana Republic chain, he was criticized for a new online shoe Web site, Piperlime, and a chain of stores for women above 35 called Forth & Towne, as store traffic fell at Gap and Old Navy.
Pressler, who will also leave the board, is eligible for up to $14 million in severance, assuming a stock price of $20 per share, Gap said.
Gap stock rose to $20.40 in extended trade after closing on the New York Stock Exchange at $19.90, down 10 cents on the New York Stock Exchange.
FALLING FLAT
At Gap, shoppers have turned away from what critics described as uninspired fashions. Attempts to introduce trendier, more fashionable items such as skinny black pants to younger customers also have fallen flat.
Old Navy, which sells cheaper apparel for the entire family, has stores in need of a make-over and has seen market share erode amid fierce competition for basics from retailers from Target Corp. to Kohl's Corp..
Wall Street and the retail industry is now wondering who will follow Pressler. The candidate pool is limited, given the qualifications needed to run a company the size of Gap, which operates more than 3,100 stores under the various brands.
Other companies, such as Home Depot Inc., have also struggled with CEOs who lacked substantial retail experience.
"There really aren't that many people around that have managed businesses the size of the Gap," said Standard & Poor's analyst Marie Driscoll.
Despite internal problems, Gap shares rose 10 percent in 2006, helped by share buybacks. But at the end of 2006, the stock traded 7 percent below January 2005 levels.
Shares of Gap have been trading at 23.5 times estimated fiscal 2007 earnings, a slight premium to Chico's FAS Inc., which trades at a forward price-earnings ratio of 21.5, and solidly ahead of Limited Brands Inc. at 16.9.