January 23, 2007, 12:00 AM

Gap looks for a new CEO

After failing to turn around flat total sales, Paul Pressler is stepping down as president and CEO of Gap. The challenge for any incoming CEO: turning around flat store sales while growing the Gap’s sizzling e-commerce sites.

Gap Inc. is looking for a new chief executive.

After failing to turn around slumping sales and revitalize the company’s brands, Paul Pressler is stepping down as president and CEO, effectively immediately. He will be replaced on an interim basis by Robert J. Fisher, Gap’s non-executive chairman of the board of directors.

A search committee has been formed by the board and will be led by independent Gap Inc. director Adrian D. Bellamy, chairman of The Body Shop International plc. Additional directors serving on the committee include Donald G. Fisher, Gap Inc.`s founder and chairman emeritus, Domenico De Sole, former president and chief executive officer, Gucci Group NV, and Bob L. Martin, the company`s lead independent director and former president and chief executive officer of Wal-Mart International.

The new Gap CEO, beginning with Fisher on an interim basis, will focus on how to grow Gap’s multi-channel merchandising program and boost sagging store sales while at the same time focusing time and resources on its fastest growing channel: the web.

Pressler is leaving in large part because of Gap’s sagging total sales, including disappointing holiday sales. For the five-week period ended Dec. 30, 2006, Gap reported net sales of $2.34 billion, a drop of 4% from net sales of $2.44 billion in the prior year. For the third quarter, Gap’s year-over-year total revenue remained flat at $3.9 billion.

But a bright spot for Gap, No. 24 in the Internet Retailer Top 500 Guide to Retail Web Sites, is e-commerce. While total sales have dropped or remained stagnant on a quarterly basis, Gap’s three e-commerce brands – Gap.com, OldNavy.com and BananaRepublic.com – continue to grow. In Q3, Gap.com sales rose by 10%, OldNavy.com by 42% and BananaRepublic.com by 35%.


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