Khakis Get the Blues

By putting finances before fashion, the Gap has lost its best customers. Can this company be saved?

Paul Sakuma / AP

Gap Chief Executive Officer Paul Pressler resigned Monday following a miserable holiday shopping season that hurt the retail chain's fourth-quarter profit.

When the retail world's bright lights gathered Jan. 15 at investment bank Financo's annual dinner in New York City (a can't -miss annual event for the apparel crowd), the gossips, according to Fortune.com, had one juicy no-show to chatter about: Where was Gap CEO Paul Pressler? Fashion insiders had been numbering Pressler's days for months. And sure enough, after nearly two years of limping sales and yet another holiday season in which the Gap's big idea (more hoodies?) drew yawns from shoppers, Pressler agreed a few days later to step down.

His departure--"a mutual agreement between him and the board," according...

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