Gap sales still down
Like-for-likes fall 7 per cent in second quarter
August 16 2002
Clothing retailer Gap is still struggling, although the company says its recovery plan is beginning to take effect.
Net sales for the second quarter increased by one per cent to $3.3bn compared to the same period last year. Like-for-like store sales were down 7 per cent, a less steep fall than the 9 per cent seen in the second quarter of 2001.
Profis of $56.8m are down 37 per cent from $89.8m last year.
In the US, like-for-like sales in Gap stores were down 13 per cent and internationally were down 12 per cent. US brand Banana Republic saw a 5 per cent like-for- like sales fall, and Old Navy was down 1 per cent.
Like-for-like sales have now been in decline for more than two years.
Gap president Millard Drexler said: “Although our business is currently pressured by continued negative traffic trends, we believe we’ve achieved much of what we set out to do strategically in the first half of the year.
“The foundation is in place for ongoing improvement in each of our brands. Our merchandise now reflects the quality and style our customers expect from us.”
Commenting on current sales, chief financial officer Heidi Kunz said that an improvement in customer numbers in July had not continued into August. “The retail environment also continues to be very promotional. As a result, our beginning of month sales are somewhat short of projections. But each brand is responding aggressively in the second half of the month with strategic promotional events and marketing to drive more business.”
