Gap's CEO Pick Surprises

Updated from 4:45 p.m. EDT

Gap(GPS) surprised Wall Street Thursday by naming a Canadian drugstore executive as its new CEO.

The San Francisco-based retailer tapped Glenn Murphy, chairman and chief executive of Shoppers Drug Mart, after an intense six-month search.

Murphy will replace Bob Fisher, the son of Gap's founders, who had been serving as CEO on an interim basis since the January departure of Paul Pressler.

The news, which came after the market closed, caught analysts off guard. Fisher had emphasized from the get-go that Gap was looking to hire a CEO with deep merchandising experience, in contrast to Pressler, who came from Disney(DIS).

Many observers had assumed the company would recruit someone from the apparel sector, especially given Gap's long string of fashion missteps. Besides its namesake, the company also operates Old Navy and Banana Republic.

"One of their key criteria was apparel experience and (Murphy) doesn't seem to have that," says Mark Montagna, vice president of specialty retail for C.L. King & Associates.

"He's walking into a really tough job because here's the biggest fish in specialty apparel, and he's got to turn around all three divisions," Montagna says.