With nothing to lose, maybe Gap should run a turnaround playbook offered by its iconic former CEO.

"I would have huge aggravation for the first couple of years," retail legend Mickey Drexler said in a Yahoo Finance Live exclusive interview when asked how he would fix his struggling former employer.

Drexler joined Gap in 1983 and famously led the retailer with much success for 19 years by focusing on well-made jeans and t-shirts. Despite moving on to become the CEO of J.Crew and now leading higher-end clothing brand Alex Mill, Drexler had some pointers for Gap.

"They are being affected, I think, by what every other big apparel chain is being affected by — too much stores, too much merchandising, too much sales, tons of competition," Drexler explained. "You have got to have a niche, a point of view. What I would do is what I did the first day [there] in 1983. I went to every style in the company, throwing out, keeping in, and renaming everything."

To be sure, Gap enters the second half of the year in chaos mode and in bad need of a leader to take charge. Last week, Gap fired CEO Sonia Syngal after another quarterly sales warning — its second straight material warning this year.

The retailer announced that long-time board member Bob Martin will serve as interim CEO, which garnered approval from Drexler.

"I know Bob very well," Drexler said. "We chat, and he is a terrifically talented guy."

Gap said it expects sales for the second quarter to decline by high single digits. Operating margins are pegged to land somewhere between zero to slightly negative.

Gap's challenges

Syngal was seen as a potential savior for Gap when she took over as CEO in March 2020 from interim CEO and board member Robert Fisher, who in turn had stepped in for ousted chief executive Art Peck.

As the former CEO of Old Navy, Syngal was credited with reviving that important division and moved quickly in her early days as Gap's leader to inject a fashion sense back into the company. That included signing Kanye West to a pricey, long-term clothing design deal.

Syngal also worked to improve the company's supply chain and shutter underperforming stores.

Unfortunately for Syngal, her time at Gap will be remembered for more promise than delivery — a byproduct, in part, of Gap letting customers down on size and style.

The company further made a major error, experts say, by expanding too aggressively into plus-size clothing at Old Navy. The initiative didn't meet sales estimates, and now Old Navy is being forced to offer steep discounts to clear the excess goods.

Meanwhile, West's collection never made the splash it was expected to, nor did it drive meaningful sales.

The onset of the COVID-19 pandemic plus the aforementioned errors did little to help Syngal's turnaround cause, concluding in a disastrous first quarter.

Gap said in late May that first-quarter sales at Old Navy and Gap plunged 19% and 11%, respectively, from the same quarter last year. The company offered up a full-year profit outlook about $1 below consensus estimates at the time.

The poor first quarter for Old Navy led to the abrupt exit of the brand's CEO, Nancy Green. On Monday, Gap named former CEO of Walmart Canada Horacio Barbeito to helm Old Navy.

Drexler said it's vital that whoever becomes the permanent CEO of Gap needs to build a strong team with incredible focus on what Gap does best, such as jeans.

"No one ever does it alone," Drexler said. "I couldn't have done what we did there [at Gap] without a strong team. And then you interview everyone, which I did at Gap, I did it at J.Crew, and Banana Republic. I started Old Navy and we did the same things. It's people who get it, so that's what I would do."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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