Gap chief executive Paul Pressler has resigned his post after more than two years of weak sales and a failed attempt to revive the struggling clothing brand.
Mr Pressler (50) was hired in late 2002 after 15 years at Walt Disney. He was charged with turning around a three-year string of mostly negative sales at established stores. Same-store sales at Gap turned positive in 2003 but were negative for six months of 2004.
Since 2005, same-store sales have dropped in all but two months.
The resignation sent its flagging shares up 2.5 per cent after hours yesterday evening. Investors and analysts said the largest apparel retailer in the world could sell itself to another company or unload some pieces.
Non-executive chairman Robert Fisher (52), the son of the company's founder, will serve as interim CEO.
Earlier this month, the company said its executive team and board would review brand strategies at its two largest divisions - Gap and Old Navy - which have lost market share and foot traffic to rival retailers.
San Francisco-based Gap also recently hired investment bank Goldman Sachs, increasing speculation that the company could be for sale. The Fisher family and its limited partnership owns 37 per cent of Gap stock.