Who will fill the GAP?

(FORTUNE Magazine) -- The annual dinner thrown by investment bank Financo is the garment business's equivalent of Swifty Lazar's Oscar bash. When Gap CEO Paul Pressler missed the Jan. 15 event at New York's exclusive Harmonie Club, industry observers interpreted it as another sign that the former Disney exec's tenure may be nearing an end. Gap's same-store holiday sales fell 8% from last year, and it reportedly hired Goldman Sachs as an advisor in January. Now the future of the beleaguered $16 billion retailer - whose brands include Gap, Old Navy, and Banana Republic - hinges on two key questions: Will the company go private, and who is going to run it?

Gap (Charts) would seem a natural target for a private-equity firm, with its relatively clean balance sheet and $2.4 billion in cash, except for one thing - the Fisher family, who founded Gap back in 1969 and still own 33% of the stock. "I don't think they want to sell," says Kimberly Greenberger, senior retailing analyst at Citigroup, "and I don't think they want to add debt, so therefore there is no private-equity deal going on." A Gap spokesman said only that Pressler and the board are focused on a turnaround.

Any new top dog, analysts insist, must truly know the apparel business. Pressler brought financial discipline and stronger branding to Gap. But he's come under fire for not understanding the stores and the clothes, which A.G. Edwards retailing industry group leader Bob Buchanan dubs "an over-assorted mess."

Who could do the job? Names being bandied about by headhunters include Polo Ralph Lauren (Charts) president Roger Farah; Susan Kronick, vice chairman of Federated Department Stores (Charts); Gap board member Domenico De Sole, former head of Gucci; and Allen Questrom, who turned around J.C. Penney (Charts) and Federated Department Stores. Questrom, now a partner at private-equity shop Lee Equity Partners, laughs off the possibility. "I'm too old for that stuff," he says. One thing any serious candidate will need is a strong constitution. "That particular job at this particular time," says Buchanan, "is a recipe for an ulcer."