The chief executive and president of troubled fashion giant Gap Inc, Millard Drexler, has announced he is to retire and will leave the company after 19 years of service as soon as the board finds a replacement.

The surprise announcement came in a statement issued by the California-based operator of over 4,200 stores late on Tuesday. Company chairman Donald Fisher and board members Bob Fisher, Adrian Bellamy and Arun Sarin will lead the search for his successor.

Commenting on his decision – which comes just a few days after Gap suffered a 68 per cent fall in quarterly profit – Mr Drexler said: "I've always loved being close to merchandise, customers and the creative parts of our business.

"In a company the size of ours, the broader demands of being chief executive have pulled me away from the things I'm most passionate about. I believe Gap, Old Navy and Banana Republic are now in a position to offer the product assortments our customers expect and that reflect what our brands have always stood for."

He added: "I believe the time is right for me to move on, and for the company to bring in new leadership to take the business forward."

Mr Drexler, who is known as Mickey, joined Gap in 1983 from US fashion group Ann Taylor. In 1987, having led Gap beyond the $1 billion sales mark and introduced GapKids, he was named president of Gap Inc.

In 1994, he oversaw the launch of Old Navy, which became the first clothing retailer to hit $1bn in annual sales in under four years. He took up his assumed his present role as president and CEO in 1995.

Mr Fisher said: "We respect Mickey's decision to retire after almost 19 years with the company. Mickey's been a dynamic partner. His merchandising passion, creativity and entrepreneurial instincts helped build three of the world's most well-known retail apparel brands.

"In launching a search for a new CEO and president, the board will be looking for someone with broad experience and leadership skills to move us forward, create sustainable growth for Gap, Old Navy and Banana Republic, and drive long-term shareholder value."

He added: "As we make this transition, the board remains confident that our brands are making the changes necessary to begin generating improved performance. So far in May, our consolidated comparable stores sales are better than the negative 17 per cent we reported for first quarter."