Analysts Call for Gap CEO’s Head
By George Anderson
Gap Inc.’s sales performance and stock price is not where analysts believe it should be and they are calling for the ouster of the company’s CEO Paul Pressler.
Under Mr. Pressler’s leadership, Gap Inc. has focused on making operational improvements.
Critics of Mr. Pressler, such as Christine Chen, an analyst at Pacific Growth Equities, believe, “A lot of the initiatives embarked on to cut costs and improve sourcing have been at the expense of the merchant and that has translated to an absence of quality.”
Supporters, such as Gap founder and chairman emeritus Donald Fisher, disagree. “Under Paul’s leadership over the past three years, Gap Inc. has built a foundation for long-term growth, dramatically improving the financial health of the company,” he told Reuters.
Richard Jaffe, an analyst for Stifel, Nicolaus, sees the reality being somewhere between the viewpoints of Ms. Chen and Mr. Fisher, although he too believes Mr. Pressler needs to leave for Gap Inc.’s stock price to rebound.
“No question they have a better business operationally than they did five years ago,” he said. “But he (Pressler) didn’t recognize the volatility of the apparel business, the fleetingness of success in retail and how you need to reinvent yourself every day.”
Moderator’s Comment: Would acceding to the wishes of analysts and replacing Paul Pressler as CEO of Gap Inc. make the company a better retailer? Do analysts
and institutional investors have too great an influence on how companies operate and does the continuing emphasis on share price come at the expense of the long-term health of
Donald Fisher said the company’s board is in full agreement: “Paul is the right person to lead this company.” –
George Anderson – Moderator