When I reviewed The Gap Inc. (GPS) back in October, I was extremely disappointed with comparable same store sales numbers, the key metric for store retailers. CEO Paul Pressler made promises to shareholders that he failed to keep. As a shareholder, I’m fed up with unfulfilled promises and paltry sales numbers.
It’s time for a CEO change. When Gap Inc. hired Goldman Sachs, I knew then it was all over for Gap CEO Paul Pressler. He is responsible for the lagging stock gains because competitors easily stole market share in the clothing retail industry without backlash. To combat their lagging sales numbers, Gap responds with “Audrey Hepburn in black pants.” You’ve got to be kidding me. Consumers need more than skinny black pants to fall into The Gap.
The company needs to rebuild the Gap image. Does anyone even remember “fall into the gap?” It was damn catchy, so why did the company drop it? Nike’s slogan has been the same for years. If it ain’t broke, don’t fix it.
While Gap was busy padding the balance sheet, Abercrombie (ANF) and Aeropostale (ARO) spent time developing new product lines, and building their reputations in a market that Gap had ruled for decades. Sears management made key acquisitions and increased sales revenue. What was The Gap Inc. doing to prevent lagging sales? They expanded globally before strengthening their US domestic stores. That’s a marketing strategy that I don’t understand.
And now, management seeks financial advice. They should have made the call to Goldman Sachs 3 years ago when the company began showing signs of weak sales growth. Of course, it isn’t too late to reverse comparable same store sales figures, but the company may go private by then.
Either way, I’m convinced that CEO Paul Pressler will be fired soon, and shareholders will see an immediate boost in the stock price. All this retailer needs is a management shake up. There’s nothing wrong with that. It’s obvious that Paul Pressler cannot run a global retailer. A CEO change will make Wall Street pay attention to The Gap Inc. because this is a broken stock, not a broken company.
I’ll continue to hold Gap Inc. Stock because shares are undervalued. Gap has reported negative sales trends for the past 2 years, yet the stock reached a five year high today. There’s lots of hidden value in Gap Inc. shares, and whether Gap goes private or not, shareholders should reap the benefits in the long run.
Pressler still has his job while a couple execs left. I wonder what he said to the board. Or else the directors are just biding their time waiting for Goldman Sachs to get a deal put together.
Paul Pressler did not fit the image or culture of the GAP, and never understood it. They tried to dumb him down, make him less classy, putting him in GAP clothes to project a trendy image - but it flopped.
I saw him at Disneyland once, a dapperly attired corporate executive: Impeccable pinstriped business suit, silk tie perfectly tied, crisp white shirt, fancy black wingtips polished like mirrors, every hair in place. He even went on a ride dressed to the nines! Corporate, slick, smart and uptight.
It was foolish to force this natty clothes-horse to trade in his Italian suits and silk ties and cufflinks and put on GAP jeans and tee shirts and try to be something else. They even forced him to take off his Gucci wingtips too and walk around in flip-flops, like a true slacker. Why? Who was impressed? A barefoot Paul Pressler? He WAS dumbed down: he lost his “smarts” along with his shoes and socks. He never understood the company or its market.
No wonder it didn’t work out.