CEO at Gap resigns as sales languish

Gap Inc. chief executive officer Paul Pressler resigned from the largest U.S. clothing chain after overseeing declining sales for 28 of the last 31 months.

Chairman Robert Fisher was named interim CEO and president while the company searches for a replacement, Gap said yesterday.

Pressler, hired in 2002 from the Walt Disney Co. to help restore Gap's stock price to the levels of the 1990s, failed to revive slumping sales at stores open more than a year. The company said this month that it was reviewing strategies for its Gap and Old Navy chains, and Pressler, 50, lowered prices during the holidays to boost revenue.

"The company didn't meet its financial targets for 2006," said Arun Daniel, a New York-based analyst with ING Investments L.L.C. The firm manages $40 billion, including Gap shares. "Clearly its performance was disappointing from a shareholder perspective."

Gap shares are 62 percent below their record high of $52.88 in February 2000. The shares rose 60 cents, or 3 percent, to $20.50 at 5:13 p.m. in extended trading yesterday. The stock was halted yesterday ahead of the announcement before closing down 10 cents at $19.90 in New York Stock Exchange composite trading.

The company also reiterated its forecast for profit of 83 to 87 cents a share for the year that ends this month.

At least 10 senior executives had left the company as of Jan. 10 while revenue declined. Sales have fallen at both Gap and Old Navy, its largest division by revenue.