Gap sees profits soar
Stronger product offer brings customers back
May 23 2003
Gap saw it a fivefold leap in profits in the first quarter of the year as stronger product ranges saw consumers resume their love affair with the casual clothing retailer.
Sales increased by 16 per cent, with profits of $202.5m for the three months to May 3 compared with $36.7 a year ago.
Gap said customers responded positively to improved product, marketing and customer service initiatives, particularly at its Gap and Old Navy stores.
Comparable store sales increased by 12 per cent, compared with a decrease of 17 per cent during its first quarter in 2002. The company also has now seven consecutive months of positive comparable store sales growth, indicating that its core customer are back in the habit of shopping at Gap after a period in which sales fell dramatically.
Gap president and CEO Paul Pressler said: “I am extremely proud of what our teams accomplished in the first quarter as we continue our turnaround, build momentum and more consistently meet and exceed our customers’ expectations.
“Strong product assortments with more brand-appropriate styles and color palettes, more effective marketing, and improved service in our stores clearly helped us gain traction and deliver quality earnings.”
Gap’s international stores saw positive sales growth of 13 per cent compared to a 19 per cent fall last year. The 376 non-stores generated sales of $411m compared to $398m last year.
