NEW YORK (FORTUNE) - Gap has lost its sense of style. After decades of outfitting the nation's weekend wardrobe, America's favorite clothing brand faltered, and CEO Paul Pressler is under increasing pressure to bring it back into fashion.

Most recently, Gap (Research) has suffered from a year and a half of disappointing sales. And things only seem to be getting worse. This February, customer traffic across the Gap, Banana Republic and Old Navy brands was down 13 percent from the same point in 2005, same-store sales were off 11 percent, and talent was fleeing in alarming numbers. (This is an excerpt from a story in the April 17 issue of FORTUNE. To read the complete story, click here.)

Gap CEO Paul Pressler

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Pressler did a mea culpa, during an investor call last spring, admitting he was "disappointed" by the retail firm's sagging sales. Pledging that a turnaround was in the works, he indicated that improvements in the company's clothing lines should appear by year's end.

Yet when the holiday season arrived, the flagship Gap brand's annual TV ad campaign -- a critical tool and ostensibly a competitive advantage for a true national clothing chain -- was shelved. "We had more work to do with Gap's in-store experience and product," explains investor-relations chief Sabrina Simmons. In other words, the clothes weren't up to snuff.

As for the turnaround that was laid out a year ago, Pressler now says it will come in the fall.

That was not the plan when Pressler took over in 2002 from his embattled predecessor, Millard "Mickey" Drexler, who had built Gap into a retail powerhouse but then stumbled badly. Gap's stock fell by two-thirds in Drexler's last two years, and the firm was drowning in $3.4 billion of debt.

Pressler, a longtime Disney (Research) executive, swiftly imposed the financial rigor that the business sorely needed. Cash flow improved radically, and investors cheered. "He has made the company financially strong again," says Gap board chairman Bob Fisher, whose parents founded the company in San Francisco in 1969. "We cannot underestimate how the debts on this business crippled us."

But fashion retail is not strictly a numbers game, and the quantitative orientation that made Pressler so appealing as an antidote to Drexler -- and initially so successful -- has ultimately come back to bite the company. Running a FORTUNE 500 fashion retailer is a tricky balance between the art of conjuring styles and the discipline of managing an enormous and far-flung operation. Gap seems to have swung from one extreme to the other.

The stock, after initially rebounding under Pressler from $10 a share to $25, has since drifted back down to $18. Same-store sales have declined for 18 of the past 21 months. By summer 2005, Pressler was referred to as "DMW," or "dead man walking," in the private-equity community.

The Gap board declined to pay Pressler a bonus in 2005, and director Meg Whitman of eBay (Research), who recommended him for the job and whom Pressler considers a strong backer, has announced she will step down when her term expires in May. (Whitman declined to comment.)

Members of the Fisher family own at least 37 percent of Gap Inc. stock. As long as they support Pressler -- which chairman Fisher insists they do -- the CEO is secure. Still, the question remains: Is a numbers guy from Disney the right person to lead Gap out of fashion limbo?

This is an excerpt from a story in the April 17 issue of FORTUNE. To read the complete story, click here.