Gap, America's largest fashion company by revenues, said last week its second-quarter
net income fell 19 per cent to $189m. The company has been unable to pass along commodity cost increases to its customers and efforts to update its merchandise have so far failed to increase sales.
US same-store sales at Gap’s namesake outlets were down 3 per cent year on year, while sales at its Banana Republic stores slipped 2 per cent and sales at Old Navy were flat. Glenn Murphy, chief executive, acknowledged that the quarter was “difficult” and expressed frustration that his stores have not been drawing enough traffic.
Earlier this year, Gap replaced the head of the North America Gap brand and appointed a new creative director, in hopes of finding fashion trends with better appeal to young people and women. Mr Murphy said he still hoped to see noticeable improvement in the results by the holiday shopping season.
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