As I noted in a post here last week, one possibility would be the spin off or sale of Old Navy. David suggested possibly the entire company could be sold; or perhaps Banana Republic. It is believed that everything is on the table. Key to this, however, is whether the company can get a "merchant" to run it. THAT is the short-term/knee-jerk play -- then and only then comes the turnaround. (And finding a good merchant with CEO experience is hard to find these days.) And careful, as one very good retail watcher reminds me, "It's not the same Gap as it was when they introduced Old Navy and turned things around." That, of course, is the opportunity.
Speculation can take this story in any direction. Just because the company hired Goldman doesn't guarantee great things for Gap holders. Goldman advised Eddie Bauer (EBHI) on strategic alternatives, and it wound up being what pretty much was a take under a half year later, relative to prices earlier in the year.
GPS 1-yr chart