In a surprise move, the ailing clothing giant picked as its new chief executive Glenn Murphy, the former head of the largest drugstore chain in Canada, Shoppers Drug Mart.
Mr. Murphy, 45, is credited with turning the $3 billion company into a $10 billion powerhouse during his six years as chief executive.
But the appointment immediately raised questions about why Gap, the nation’s largest specialty apparel chain, would select a leader outside the clothing industry.
Gap, founded in San Francisco in 1969, produced one of the retail industry’s most heralded chief executives, Millard Drexler, whose fashion acumen earned him the nickname “merchant prince.”
But his successor, Paul S. Pressler, who ran the Walt Disney theme parks, was heavily criticized for his lack of an apparel background. After his ouster in January, Gap intimated that it would seek out a seasoned clothing executive.
According to people briefed on the search process, Gap put out feelers to several highly regarded apparel industry figures, like the chief executive of Avon, Andrea Jung, a former Neiman Marcus executive. But these executives said they had little interest in the job.
The position is considered the biggest challenge in the business. Gap, the casual clothing chain that turned staples like T-shirts into must-have fashions, has faltered badly over the last five years, with sales and profits slipping as it churned through looks and executives.
Several months ago, according to people briefed on the matter, who were not authorized by the company to speak publicly, the company began looking into the possibility of selling itself off. But that sale has not materialized and now appears increasingly unlikely to happen.
Mr. Murphy, who has run grocery and book chains in Canada, took a keen interest in the job, and invited Gap’s interim chief executive, Robert J. Fisher, and his father, Donald, who founded Gap, to tour a Shoppers Drug Mart in Canada with him.
In return, the Fishers took Mr. Murphy on a tour of a Banana Republic and Old Navy in Canada. The executives, and Gap’s board, were convinced that his experience in retail would compensate for his lack of a fashion background.
Robert Fisher, the interim chief executive, said that “when Glenn met with the board, we were immediately impressed with his insights into leading and reenergizing retail brands and we knew we had found our next leader.”
Mr. Murphy said he would purchase 150,000 shares of Gap stock to signal that he was willing to invest his own money in the chain’s future. As chief executive of Gap, he will receive, among other things, an annual salary of $1.5 million, plus a signing bonus of $1 million, the company said.
John Morris, an analyst at Wachovia Securities, said the appointment cleared up uncertainty about Gap’s leadership, but Mr. Murphy’s background was likely to disappoint investors.