Wanted: CEO for Struggling Clothing Retailer
Four-plus years after being named chief executive officer at Gap Inc., Paul Pressler is out. The company announced yesterday that it and Mr. Pressler had “mutually agreed” on his departure.
The ousting, which has been a source of speculation in retail industry circles for some time, will serve to once again raise the question of whether the company will seek a buyer(s) for all or some of its businesses.
An unidentified source described as close to the company by Women’s Wear Daily, sought to quash the speculation. “They’re not going to break it up. Right now, they’re looking for someone who can turn it around. The Fishers absolutely don’t want to sell.”
As to the Fishers, Robert Fisher, the son of Gap founder Donald Fisher, will serve as interim chairman of the company. The Fisher family owns 25 percent of Gap Inc. stock.
In a company press release, Mr. Fisher said, he would focus on working with Gap Inc. employees “to enhance our focus on what has been at the heart of the company’s past success, reinvigorating our brands and charting a new course for the future that will deliver strong returns for our shareholders.”
At the beginning of his tenure, Mr. Pressler had received high marks for establishing fiscal discipline at the company. His failing, ultimately, was on the fashion side of the business where he and those he hired failed to connect with Gap shoppers.
Bobbie Lenga, managing director of the retail practice at executive recruiter Russell Reynolds Associates, told The Associated Press, “The back end of the house was something that Paul did a phenomenal job. But he is not a strong product person. Product is what drives the business.”
Gap Inc. has created a search committee made up of Adrian Bellamy, chairman of The Body Shop International plc, Donald Fisher, Domenico De Sole, former president and chief executive officer, Gucci Group NV and Bob Martin, former president and chief executive officer of Wal-Mart International.
According to the company, the committee was looking to recruit a chief executive officer “who has deep retailing and merchandising experience ideally in apparel, understands the creative process and can effectively execute strategies in large, complex environments while maintaining strong financial discipline.”
Among those on the early speculation list, according to a New York Times report are Roger Farah, the president of Polo Ralph Lauren and Paul Charron, the former head of Liz Claiborne. Mickey Drexler, CEO of J. Crew and former CEO of Gap Inc., has denied interest in returning to the company.
Discussion Questions: What do you think Gap Inc. should be looking for in its new CEO? How important will talent evaluation be in the ultimate success or failure of the next CEO of Gap Inc.? Are there any executives you would like to throw into the mix as candidates for the next CEO of Gap Inc.?
- Pressler Out, Robert Fisher Steps Up at Gap – Women’s Wear Daily (sub. required)
- Gap ousts Pressler; search on for CEO – The Associated Press/Contra Costa Times
- Under Fire, Gap Chief Steps Down – The New York Times