Gap Names Pressler CEO
Gap Inc. hopes to inject a little happiness into its kingdom by naming a veteran Walt Disney Co. executive to serve as its chief executive officer.
Paul Pressler, formerly head of Disney’s theme parks and resorts division and president of Disney stores, will become CEO of the San Francisco-based clothing retailer, effective immediately. He succeeds Millard S. Drexler, who announced in May his plans to retire as soon as his successor was found.
Pressler joins struggling Gap before the all-important holiday sales period. In September, Gap, which operates over 4,200 Gap, Banana Republic and Old Navy stores worldwide, reported its 29th straight month of sales declines at stores open at least one year. Debt rating agencies also have warned that the company’s rating could fall if the retailer does not improve its performance soon.
Much of Gap’s woes are owed to its overexpansion and adoption of too-trendy designs that alienated its core customers who were buying classic jeans and T-shirts.
Some analysts and industry observers expressed surprise at Pressler’s appointment because he was not among the rumored contenders yet say the choice made sense.
“The name of that fellow was on nobody’s lips,” said Kurt Barnard, president of Barnard’s Retail Consulting Group in Upper Montclair, N.J. “But, he’s probably thought of as being an expert at entertainment retailing and a little bit of excitement in the Gap stores wouldn’t hurt.”
Merrill Lynch analyst Mark Friedman agreed with the sentiment.
“We applaud the decision to hire from outside the retail world for several reasons, least of which is the lack of highly qualified talent within the industry,” he said in a research note. “We believe the choice of a Disney executive is not surprising, as the company, like Gap, is creatively based, marketing- driven, brand-focused, consumer-focused and, of course, is located in California.”
Pressler, 46, spent 15 years with Disney. During his tenure, the number of Disney stores grew from 160 to 335 in eight countries. —Nola Sarkisian-Miller
