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After four years of trying to engineer a turnaround at Gap Inc, Paul Pressler resigned as CEO yesterday. Chairman of the Board Robert Fisher will become the interim CEO. Despite much experimentation with store layouts and fashion trends, including a holiday season back-to-basics strategy that yielded an 8% sales drop, the company has not succeeded in making a financial comeback. Gap is now consulting with Goldman Sachs about a new strategic direction for the company, which could include a possible sale. The company is valued at $16 billion and a sale could potentially bring in more than $18 billion. Analysts expected Pressler's departure. Same-store sales have fallen in five of the last seven years. Gap shares are currently 62% below their all-time high of $52.88 in February 2000. The shares rose $0.50 to $20.40 (2.5%) in yesterday's trading. After the announcement, the stock rose 3.3% to $20.55 in after-hours trading.

• Sources: NYTimes, Bloomberg, MarketWatch.com, WSJ
• Related commentary: Gap: The Short Case, Is Gap a Private Equity Takeover Target?, Can Goldman Sachs Help With a Gap Turnaround? Conference call transcripts: Gap Q3 2006 Earnings
• Potentially impacted stocks and ETFs: The Gap, Inc. (GPS). Competitors: Abercrombie & Fitch Co. (ANF), American Eagle Outfitters Inc. (AEOS), J. Crew Group, Inc. (JCG), AnnTaylor Stores Corp. (ANN), Limited Brands Inc. (LTD), Urban Outfitters Inc. (URBN), Target Corp. (TGT), Kohl's Corp. (KSS). ETFs: : SPDR Retail (XRT)

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Source: Gap CEO Calls It Quits