Gap's first franchise deal in Asia

US clothing chain Gap has announced it has embarked on its first-ever franchise deal in Asia. It has signed an agreement with leading Singaporean retailer FJ Benjamin Holdings, who will open the first Gap and Banana Republic stores in Singapore and Malaysia.

Chief executive Frank Benjamin said in a statement that the company was planning “to aggressively launch and grow these brands.” The first Gap store will open later this year in Singapore, followed by a Banana Republic store in 2007 and the further opening of approximately 30 stores by 2010.

Commenting on the agreement, Andrew Rolfe, the head of Gap's international division, said that FJ Benjamin had “significant expertise in this market and we're delighted to enter this collaboration with them.”

Benjamin Holdings also retails and distributes brands in Far East Asia and Australia that include Valentino, Guess, La Senza and Raoul, as well as watch brands Girard-Perregaux and Jean Richard. Meanwhile, $16.3 billion (£9.3 billion) Gap Inc. operates about 3,000 stores worldwide. Outside the US, the group operates 130 Gap stores in the UK, 30 in France, 100 in Canada and 90 in Japan, but in the US group sales have slipped. Chief executive Paul Pressler said last year that the group would open 50 more international stores by 2007, hoping to return to growth by halting its over-expansion in the US.

Gap Inc spokeswoman Kris Marubio told Women's Wear Daily that in addition to Asia “we are definitely looking at the Middle East and other areas” for further franchising. Last year, the company also said that it was looking to possibly open stores in China, perhaps through franchises.

Last year the first five Banana Republic stores outside North America – Canada has its share of the more upmarket chain - were opened in Japan, and the franchising of this brand signifies a real expansion of its presence outside the US.

To facilitate the selection of merchandise for franchisees, Gap will open a 10,000 square foot showroom in New York.

Meanwhile Saks Fifth Avenue is also venturing into the Far East. The US department store is close to signing an agreement to open a licensed store in Shanghai, reports WWD.
19 January 2006



Gap to focus on UK and Europe

Gap, who's UK and European retail sales have slumped in comparison to Zara, H&M and other fashion-led high street brands, is to focus on its European product and modify it from its US offer.

European demand for more directional lines have forced Gap inc to rethink its European approach to retailing. A new design team is in the process of being set up in London, a breakthrough for the company as previously all design was done from its New York headquarters. Similarly, Gap is to develop UK-specific advertising campaigns following Clalre Dobbie joining as its first European marketing vice-president.

The chain could adopt UK celebrity faces to help shoppers better identify with Gap's style. Its is well known for signing US stars such as actress Sarah Jessica Parker and Madonna to endorse the chain across all markets. But Gap Japan recently celebrated its 10 th birthday and incorporated Japanese celebrities into its promotional material. Gap is decentralizing its operations from the US and creating a London-based buying office in addition to its new design team.

Gap Europe president Stephen Sunnucks told Draper's Record that the new team would enable it to react in-season and slash lead times by up to eight weeks. He said 2006 priorities are tighter stock control, decreasing Sale activity and re-energising visual merchandising. Group sales fell 5 per cent to £1.3 billion for December. Gap International reported like-for-likes down 3 percent for the same period.

Gap has 130 stores in the UK.
17 January 2006

Gap reports continued sales decrease

US apparel giant Gap has reported a drop of 4 percent in November same-store sales. Improved results at the Old Navy brand have partially compensated for difficult trading at Gap and Banana Republic.

The group's total net sales for November amounted to $1.4 billion (£808 million), unchanged from last year.

Gap North America saw same-store sales decrease 5 percent, compared with last year's 1 percent drop. Banana Republic North America experienced a 5 percent sales decrease, down from 3 percent last year, while Old Navy North America sales dropped 2 percent, up from a 5 percent decrease last year.
The group's international sales remained stagnant compared to last year's 5 percent decrease.

"Although traffic remained challenging at Gap and Banana Republic in November, we were pleased that traffic trends improved at Old Navy as customers responded favourably to our second Holiday product flows and our Black Friday promotional events,” said Sabrina Simmons, Senior Vice President, Treasury and Investor Relations. “However, promotional activity across the brands drove Gap Inc. merchandise margins significantly below those of November last year.”

Year-to-date net sales decreased 1 percent to $12.6 billion from $112.8 billion last year on a same-store sales drop of 5 percent.
The group's new brand Forth & Towne, which was launched in August of this year, reported a 20 percent drop in income for the third quarter.

As of the 29 November Gap Inc. operated 3,132 stores compared with 3,069 store locations last year.
4 December 2005



Gap earnings fall

Gap Inc. delivered a largely anticipated weak third-quarter earnings report Thursday due to disappointing customer response to fall merchandise and less people visiting its retail outlets.

The company said because November traffic levels have deteriorated more than expected, it sharply lowered full-year earnings expectations to below Wall Street estimates.
In the three months ended Oct. 29, Gap earned $212 million compared with $265 million a year ago.

Revenues fell 3 percent to $3.86 billion, and consolidated same-store sales were down 7 percent. Year-to-date, the specialty retailer had earnings of $775 million from $772 million, a year ago. Revenues fell slightly to $11.2 billion from $11.37 billion.

Gap maintained that its merchandising issues are "fixable" and that it is taking "aggressive" actions to resonate again with customers. Gap said on a post-earnings conference call that it will focus on the three fundamentals of retailing: product, including providing key merchandise items to deliver its "fresh, casual, American-style" aesthetic; store experience, including visual displays, customer service and remodels, and marketing, including its holiday "magalogue" and appropriate television and print campaigns.

Paul Pressler, president and chief executive officer of Gap Inc., said on the conference call that, during the past two years, Gap focused on building critical infrastructure and operating efficiencies "at the expense of creating amazing product and a compelling store experience." Now, he said, the company is "100 percent focused on the customer and improving product and the in-store experience."

18 November 2005



New designer for Gap

US clothing retailer Gap announced on Tuesday that it will appoint a new chief designer for its main Gap brand. The announcement came as the company continues to battle with falling sales.

Charlotte Neuville will replace Pina Ferlisi, effective immediately. Neuville was previously head of women's wear design at the small fashion retailer New York & Company. She spent nine years at the company and led its design team. Prior to that she worked in senior design positions for Cygne Designs, Jones New York Sport, Adrienne Vittadini and Perry Ellis. She also had her own successful fashion collection.

Gap adjusted its profit forecast for this year in August, stating that the revamp of the brand's women's clothing line had failed to garner the results it had hoped for.

Gap's chief executive Paul Pressler admitted that the group has been struggling to attract new customers and that it has lost its merchandising edge. One of its top priorities has become the revamping of its Gap women's collection. To entice customers it has even been offering free music downloads.

Pressler said that the revamp was not expected to deliver results until the Spring of 2006, at least.

Cynthia Harriss, Gap brand president, said the Group was “excited” about Neuville's appointment and said that with “more than twenty years of design experience, Charlotte has a strong and proven ability to interpret style and provide leadership in product development.”


12 October 2005

Gap still absent from Internet

The US retail giant Gap has said on Tuesday that it still does not have a specific date for the reopening of two of its most popular websites, and The sites have been off line for almost two weeks. Gap closed three of its online retail store on 24 August, promising to have them back online “soon”. The company promised “innovative new features to bring you an extraordinary shopping experience”. When the Banana Republic site went online again, the other two remained unavailable. and generated $209 million in sales in the first half – an average of $1 million a day – which accounts for 3 percent of the group's total sales. Gap is currently struggling with declining sales in its US stores. The company spokeswoman, Chris Marubio, said that the Gap had timed its overhaul for the end of August, in time for the “back to school” shopping season, but still with enough room for the run up to the holiday season. Analysts were mystified by the delay in the overhaul process.
7 August 2005


Gap closes internet shops

Already mired in a sales slump, Gap Inc. has closed its two most popular Internet stores so the clothing retailer can upgrade its online operations before the pivotal Christmas shopping season. Both and have been closed for the past week, driving frustrated shoppers to other web sites to buy clothes. Banana Republic, another chain owned by Gap, also closed its site two days last week before reopening Aug. 26.

Hoping to minimize the customer inconvenience, Gap Inc. waited until after most back-to-school shopping had been finished before launching a "soup-to-nuts" overhaul of its major e-commerce sites, said company spokeswoman Kris Marubio. "We think this is going to make for a more compelling and exciting experience for shoppers," Marubio said. The San Francisco-based company isn't disclosing when the sites will reopen. Instead, visitors are being asked to leave their e-mail addresses with and so they can be informed when the sites are selling clothes again.

"It's major project for us so we know it's going to take some time," Marubio said. She warned the company may still have to fix some bugs even after the sites reopen. The continuing closure of and is likely to put another small dent in Gap Inc.'s sales, which have been sagging in recent months. The slump already has prompted management to lower its profit projections for this year. and each generated online sales of $236 million last year, accounting for 3% of Gap Inc.'s total revenue of $16.3 billion. attracted 4.2 million visitors in July while drew 2.6 million visitors, according to Nielsen/NetRatings, a research firm.

2 September 2005


Gap struggles with young consumer

In a world of GBP170 jeans and trendy urban styles, The Gap is drowning in a sea of cheap denim and outdated khakis. The Gap's credibility gap widened even further last week, when the apparel retailer slashed its full-year earnings guidance by almost 10%. Though other clothing companies are apt to fall in sympathy with The Gap over the next day or two, The Gap's problems are very much its own, and not universal. In fact, the Gap's problem is that it is no longer a destination store for shoppers.

Looking for jeans? Unless you're over 40 or unconcerned with fashion trends, one could guess that you aren't shopping at The Gap. One customer group that the company has struggled to win over in recent years is teen-agers. Unfortunately, this quarter's results offered little hope on that front. In fact, if you're looking to get away from all the teens hanging around the mall, The Gap is a decent place of refuge. The company's conservative styles have pushed teens to trendier stores such as American

Another problem is the flat, tired market for khaki -- the company's big winner a decade ago. The urban stylings of Urban Outfitters, H&M and Zara have left The Gap struggling to find a profitable niche. The Gap's Banana Republic unit tries to serve this market, but its conservative edge leaves it posting disappointing results more often than not. In the second quarter, that chain's same-store sales fell by 3%.

Frankly, after a few encouraging quarters it looks as though The Gap has to go back to the drawing board. Management admitted as much when it noted that its summer merchandise failed to resonate with consumers, and that weak sales in August spoke poorly about how well its fall merchandise had caught on. For The Gap to compete and win in the teen and young-adult markets, it needs to completely change its image. But changing an image that took years to cultivate risks losing the core, the older customer who has remained loyal to The Gap throughout its many ups and downs.

24 August 2005


Gap targets 35+ woman

Tomorrow sees the opening of Gap's new women's apparel retail concept, Forth & Towne in the Palisades Center Mall in West Nyack , New York . Four more stores will open around Chicago on 31 August.

Forth & Towne is geared towards women in the 35+ age group, with a discerning eye and a desire for a complete shopping experience. The new store will offer four brands, Allegory, Vocabulary, Prize and Gap Edition. Allegory offers feminine suits and classic pieces. Vocabulary provides for the individualist with rich knits, prints and jewellery. Prize is the fun brand, offering wearable trends in light fabrics. Meanwhile, Gap Edition offers everyday basics that the seasoned Gap shopper has come to love and expect.

The key attraction of the Forth & Towne store will be its fitting salon, which is located in the middle of the store and features a circular design. The fitting rooms are spacious, fitted with three-way mirrors, personally adjustable lighting, refreshments and accessories to help complete an outfit. Moreover, consultants will be at the ready to help put together a look.
23 August 2005



Rumours of privatisation Gap

Rumours are circling that US fashion group Gap Inc may be taken private, according to Analysts are reputedly speculating over the Group's future in which it may be bought out by its management in a cash bid. The group – which operates Banana Republic, Old Navy and the Gap chains - has suffered a slowdown in sales in recent months.
11 August 2005




Soon your favourite music will come with your favourite jeans. The Gap is teaming up with Apple iTunes Music Store and will be giving away free music downloads with the purchase of a new pair of jeans. To be launched in The States, the new ad campaign will feature musicians singing covers of their favourite song while wearing Gap jeans. The company will be offering those collected covers in a CD at Gap stores for customers who make a $60 or more Gap purchase.

The CD contains eight songs exclusively recorded for Gap by the stars of the new campaign, a director's cut of the autumn TV advert and behind-the-scenes footage from the filming of the commercial. Europeans will have to wait a little longer for collaboration.

28 July 2005


Mind The Gap Of Declining Sales

Gap has said it expects pressure on sales to continue across the summer, after reporting a further decline in May. The company reported net sales of $1.17bn for the four weeks to May 28, a 3 per cent year-on-year fall. Comparable store sales for May fell by 8 per cent compared with a 6 per cent increase in May 2004.

Sabrina Simmons, senior vice president, treasury and investor relations, said: "Overall, total company sales were disappointing in May and merchandise margins were meaningfully below last year." Comparable store sales by division for May saw a 9 per cent decline in Gap North America, a 7 per cent dip at Banana Republic and an 8 per cent fall at Old Navy. Gap International comparable store sales were down 2 per cent.

In the first four months of the financial year, group comparable store sales are down 5 per cent compared with a 7 per cent increase in same period a year ago.

4 June 2005


Stephen Sunnucks Facing Challenge At Gap

Gap has reported a further decline in international sales, proving tough times ahead for newly appointed European president Stephen Sunnucks.

For the month of April, same store sales slipped by 12 per cent compared to only 5 per cent for April last year. This was higher than anticipated and steeper than the rate of decline across the 13 weeks to April 30, the first quarter of Gap's financial year, which saw international same store sales fall by 6 per cent.

Sunnucks, who has been appointed to the newly created position of President of Europe, Gap International, was chief executive of fashion retailer New Look until last year. He is reported to be considering bringing Gap's other US brands, Old Navy and Banana Republic, to Europe.

Gap's total sales for April were $1.2 bn, a 2 per cent fall on April last year. Total same store sales for the month decreased by 5 per cent, with Gap North America and Banana Republic both recording same store sales declines, and Old Navy same store sales flat. Sabrina Simmons, senior vice president, said "In April, the clearance of remaining spring merchandise put pressure on our merchandise margins, which resulted in merchandise margins significantly below those of April last year."

For the first quarter, total company sales were $3.6bn, a 1 per cent fall, while first quarter comparable store sales decreased by 4 per cent.

7 May 2005


Gap's new brand

The US apparel giant Gap Inc. last week revealed that the name of the company's new women's apparel retail concept is Forth & Towne. At the company's investor update meeting Paul Pressler, President and Chief Executive Officer of Gap Inc. said: "Launching the brand Forth & Towne, which focuses on women over the age of 35, represents an important long-term growth opportunity for Gap Inc."

Forth & Towne will be the newest concept in Gap Inc.'s stable of brands, which includes Gap, Banana Republic and Old Navy. The new brand will launch in four test stores in Chicago and one in New York in the fall of 2005. Forth & Towne offers a wide range of sizes and assortments for many different occasions. The emphasis of the brand is on fit.

Gary Muto, President of Forth & Towne said: "We created an address with the name 'Forth & Towne', because we wanted it to evoke a sense of place - to signify a special and unique shopping destination. 'Forth' references our fourth brand, and 'Towne' conveys a sense of community that we want to create for our customers when they shop with us."

The development of the new brand was first announced on 15 September 2004. It targets the fast growing segment of women over 35. This segment is known for its group spending power, which accounts for approximately 39 per cent of women's total apparel expenditures.

Gap Inc.'s fiscal sales for 2004 amounted to $16.3 billion (GBP 9.24 billion). The company operates about 3,000 stores in the US, the UK, Canada, France and Japan.
25 April 2005


Gap reports disappointing sales

US fashion retailer Gap Inc. has reported "disappointing" sales for March. Net sales for the month dropped 1 per cent to $1.48 billion (GBP 86 million) from $1.49 billion the year before.

Sames-store sales fell 1 per cent, compared with an increase of 5 per cent last year. Banana Republic reported a drop in sales of 1 per cent compared to the growth of 25 per cent that it enjoyed last year. Old Navy also experienceda 9 per cent decrease in sales, compared with a 11 per cent rise last year.

Gap's senior vice president, treasury and investor relations, Sabrina Simmons, said that April would be under pressure as well, due to the company's clearing of left over spring goods. The company's net sales for the year so far dropped 1 per cent to $2.40 billion compared with $2.42 billion last year.
11 April 2005


Gap honoured by NAFE

The US fashion chain Gap Inc.was recently honoured by the National Association for Female Executives (NAFE).

During NAFE's annual 30 Best Companies for Executive Women awards in New York, Gap received an award from the association. Eva Sage-Gavin, Executive Vice President of Human Resources at Gap Inc., was there to receive the award and said: "Gap Inc. is proud to be recognized as a company that supports the development and advancement of women. At Gap Inc., women represent 70 percent of our employee population and over half of our management team."

NAFE chooses companies based on the number of women that are in the running for management positions and that actually holds management positions. The association also looks for companies who are able to demonstrate a commitment to the development and continued success of women within the company.

NAFE was founded in 1972 and is the largest women's professional and business association in the US. It publishes NAFE Magazine, a bi-monthly publication, which is distributed to 65.000 members.

The association is part of Working Mother Media, which operates the Working Mother magazine, the annual 100 Best WorkLife Conference and the more recent iniatitive Best Companies for Women of Colour. The NAFE began conducting the Top 30 Companies for Executive Women in 2002.

Gap Inc is a leading global fashion retailer for men, women, children and babies under the brands Gap, Banana Republic and Old Navy. The company operates over 3,000 stores in the US, the UK, Canada, France and Japan. Fiscal sales for 2004 amounted to $16.3 billion (GBP 9.25 billion).
22 March 2005


Joss Stone to mind the Gap

Joss Stone, the Devon-born soul singer, is set to be chosen by the clothing giant Gap to be its next face, replacing Sex and the City actress Sarah Jessica Parker. Already worth £5m following the success of her first two albums, a deal with Gap could earn her about £10m. Her anointing as Jessica Parker's successor indicates a move towards the all-important teen market by Gap.
19 March 2005


Poor sales at Gap

Gap has reported flat total sales for February, with same-store sales decline across all its divisions.

Group sales of $924m for the four weeks to February 26 were level with last year, with group comparable store sales down by 3 per cent.
By division, Gap North America saw a 2 per cent comparable store decline, while same store sales fell at Banana Republic by 6 per cent and at Old Navy by 1 per cent. Gap's international business saw an 8 per cent same store sales decline.

Sabrina Simmons, senior vice president, treasury and investor relations, said: "We were pleased with improved year over year total company merchandise margins, as we continued to sell spring merchandise in February.
7 March 2005


Gap On Rebound

International clothing retailer Gap has sounded a confident note on its 2005 prospects after a strong finish to its financial year despite continued tough same-store sales comparisons.

Gap's fourth-quarter earnings were $370m, up from $356m a year ago and ahead of Wall Street forecasts. A focus on cost savings, a low shrinkage rate, and strong sales in the group's Banana Republic chain all helped counter a tough sales environment for the Gap and Old Navy chains in the US, and the Gap International business. Group sales for the quarter were flat at $4.9bn, with group same store sales down 3 per cent.

Across the year to January 29, group sales of $16.3bn were up 3 per cent. Group same store sales were flat, with Gap International same store sales down by 8 per cent across the year. The year saw Gap exit the tough German market, selling its stores to H&M.

Gap president and CEO Paul Pressler said: "In 2004, we delivered solid earnings performance, while mining growth opportunities within our brands, significantly strengthening our balance sheet, retiring debt and completing a $1bn share repurchase program.

"Having stabilized our operations and well positioned our brands in the marketplace, we have a strong foundation for 2005. Going forward we will focus on driving growth opportunities across our brand portfolio, strengthening operating performance and enhancing shareholder value through cash distributions."

Gap said it expects earning per share to be between $1.41 and $1.45 a share in the 2005 financial, above Wall Street estimates of $1.40 a share. During the year, the company expects to open about 175 stores, weighted towards the Old Navy chain, and close about 135 stores, weighted toward Gap. In November, the group confirmed plans to open three Banana Republic stores in Japan this year, the first time it has taken a non-Gap brand outside North America.
25 February 2005


Tough trading for Gap

Gap has continued to find trading tough, reporting a 7 per cent decline in same store sales during January. Autumn / winter sales were worse than the 0.5 per cent decline forecast by the clothing retailer.

Across the fourth quarter, total company sales were flat at $4.9bn, with same store sales own 3 per cent, with Gap US same store sales flat and Gap International sale down 8 per cent across the quarter. Banana Republic same store sales were down 1 per cent and Old Navy down 4 per cent versus positive 4 percent last year.

In 52 weeks to January 29, total group sales were up 3 per cent to $16.3bn, with comparable store sales flat compared with an increase of 7 per cent last year.
7 February 2005


Gap authorises share buyback

US retail giant Gap Inc reported last week that its board of directors has authorised the repurchasing of an additional $250 million (GBP136 million) shares, effective immediately. Originally the company had issued a $750 share buyback programme. At present it has repurchased approximately 33 million shared for $686 million.

The shares will be repurchased over the next twelve months, at prices deemed appropriate by management. This means that repurchasing may take place on the open market at pre-approved times and prices. Gap has reduced its debt by more than $1.5 billion, which includes debt retirement in the third quarter. Last week the company reported sales of $1.4 billion for the four-week period ending 27 November. The amount remained unchanged from the same period last year.
7 December 2004


Tough market for Gap

A decline in sales for the US chain Gap is proving tough markets are international. In the four-week period to November 27, group sales of $1.4bn were level with last year. Total comparable sales fell by 4 per cent for the month across Gap's four divisions.

Thus far, Gap International sales has fallen by 9 per cent. The Banana Republic chain saw a 3 per cent decline, with a 5 per cent decline in the Old Navy division.
3 December 2004


Gap Love Accessories

US retail giant, Gap, is introducing a new retail concept on 18 November. It will be opening an accessories-only shop next to its flagship store on Fifth Avenue.

The new shop is called Love, and will feature a wide array of bags, shoes, belts, flower pins, gloves, hats and scarves. Some of the accessories have been worn by Sarah Jessica Parker in the latest Gap advertisements, including flower corsage pins and scarf belts. The name Love is derived from the reactions of many clients to their Gap accessories: "I love my Gap bag".

The new shop will feature a different, more intimate interior than that of the main store. Marble fixture, bleached white floors and a seating area will make up the new boutique. Design sketches by the vice president of accessories design, Emma Hill, will be on display throughout the shop, and there will be special packaging: boxes and bags will be decorated with sound bites from the design team on the collection's inspirations.

Gap is considering making this new stand-alone venture a permanent fixture, although there are no plans to introduce the concept nationwide as yet.
11 November 2004


International Sales Decline At Gap

Gap is continuing to see its international sales decline as many markets remain tough. The retail group has reported sales of $1.3bn for the four-week to the end of October, a 5 per cent increase on the same period last year.

Comparable store sales for October increased by 3 per cent compared with a 1 per cent increase a year ago. In the US, the Gap chain saw 7 per cent sale growth, with Banana Republic up 3 per cent and Old Navy up 4 per cent.

In contrast, Gap International same store sales were down by 11 per cent.
Sabrina Simmons, senior vice president, treasury and investor relations, said; "We're pleased with how our overall performance improved in October as Gap, Banana Republic and Old Navy continued to clear fall merchandise. We're well positioned for holiday and the launch of our marketing campaigns this month."

Across the 13 weeks to October 30, group sales are up 1 per cent to $4bn, with same store sales down 1 per cent. Gap International same store sales were down by 10 per cent across the quarter.

5 November 2004



That Tweed Jacket

What's the most covetable item of the season? Probably that tweed jacket you've been reading about in every fashion magazine since August. And you'd have to be sightless to have missed that jacket Sarah Jessica Parker wears in Gap's autumn/winter advertising campaign. So exactly who can be found wearing one? From fashion editors to mummies and wannabe bohemians to the trendy Shoreditch crowd, they are wearing them with jeans, flippy skirts, even over dresses.

The Gap jacket in question comes in pink and in herringbone, has been a sellout for weeks, and has easily become the most covetable item of the season. Not since the run on the Gap stripy scarf back in the winter of 1999 has there been such hysteria surrounding a high-street item. If you want the one worn by Sarah Jessica in the ad, then you will need to start calling flagship stores in Philadelphia as stores in the UK have sold out.

So what is so special about that jacket? The answer is it works; meaning it's tweed (very now) and it's casual (can be worn with practically everything in your wardrobe). It's extremely skinny in its fit, therefore flattering and has leather buttons and a pretty lining for those who pay attention to the finer details.

More importantly, the Gap know how to work their marketing magic. This autumn it has shifted tack and tapped into our current desire for the quirky and original by showing its apparel on our favourite style icon - Sarah Jessica Parker. The slogan is "how do you wear it?" Maybe like SJP - a little bit funky, a little bit off - is the message. Go ahead you can be her!

And while you probably don't need any more clothes, it's all about sharing in the fantasy.
18 October 2004


Gap Inc. sales drop

The American casual wear company reported a 1% net sales drop for September. The net sales for September amounted to $ 1.45 billion, compared with $ 1.47 during the same period last year.

Gap Inc. owns Gap U.S., Gap International, Banana Republic and Old Navy. Only Banana Republic achieved a positive result with 6% sales this September. However, the results pale next to the 12% sales it managed the same time last year.

The company reduced its total number of stores to 3,038 this year, compared with 3,076 last year. Sabrina Simmons, Senior Vice President of Treasury and Investor Relations, confirmed the disappointing results but said that the company was taking a long-term view on business and that holiday products are being introduced at the Gap, Banana Republic and Old Navy later this month.
11 October 2004


Gap Targets 35-Plus Women

Gap is to test a new store concept next aimed at women over 35. The unnamed chain will be tested in the first half of 2005 and will include clothing for all occasions.
16 September 2004


Gap Closes Factories Breaching Labour Standards

Gap Inc. has cancelled contracts with 42 of its clothing manufacturers in China this year for breaches of Gap's labour standards. Gap Inc. announced the changes in its Social Responsibility Report, which described Gap's internal investigations into the labour practices of its factories worldwide in 2003.

The dropped factories accounted for 9 percent of the 464 factories producing merchandise for Gap in China, the highest rate of any other nation for Gap compliance violations.

China is one of the 50 countries that Gap Inc. outsources its labour to, and is Gap's largest source, producing 16 percent of its merchandise in 2003. The report stated that China provides some "unique and complex compliance challenges," such as the difficulty of addressing workers' needs and grievances "in a country that does not recognize workers' right to associate freely outside of government approved organizations."

The report said the reason such a high number of factories were dropped as Gap's suppliers is due to the "concealment of overtime and unwillingness to share complete and accurate information."

More than 50 percent of the factories failed to fully comply with local laws. Twenty-five to 50 percent had poor records of the age of their workers, unclear wage statements and poor working environments, such as a lack of first-aid kits, personal protective equipment, operational safety devices on machines and proper means of storage for flammable and hazardous materials. Investigators found physiological coercion and verbal abuse violations occurred in as much as 25 percent of the factories. Also common were violations of local legal working conditions and restricted access to Gap internal inspectors.

Since the release of the report, human rights groups such as Sweatshop Watch have praised Gap Inc. for its openness and its effort to improve the working conditions in its factories. The positive feedback contrasts with the accusations of labour abuses Gap Inc. received in recent years. Human rights activists are putting pressure on other apparel and manufacturing companies with factories abroad to follow suit. Companies like Wal-Mart are reconsidering the amount of information they should report on labour conditions in its factories worldwide.
8 September 2004


Gap To Export More Brands

Gap is gearing up for international expansion and may export more of its retail brands outside the US. The clothing retailer, which operates the Old Navy and Banana Republic chains in the US as well as the core Gap chain, is also considering adding new retail brands.

Gap's chief executive Paul Pressler, has told the Financial Times that he is looking further growth of the Gap chain in its core overseas markets, the UK, France and Japan. Gap exited Germany this month with the completion of a deal to transfer its German stores to H&M.

Gap's international expansion has been on hold as Presser focused on a sales recovery in US, but Pressler told the FT he could envisage both Banana Republic and Old Navy in Europe, and is also looking at a possible fourth US chain. He said: "We also believe that we need a fourth brand, and some day we'll need a fifth brand."

There has been speculation that Gap could target older 'baby boom' customers with a new brand. Pressler did not confirm ths, but said: "When you look at the areas where we compete, we clearly under-penetrate this boomer customer, 35-plus or 40-plus. So, intelligently, that would be an opportunity to grow without cannibalising our existing businesses."
26 August 2004


Gap To Close More Stores Than Planned

Retailer Gap stated it plans to close about 150 stores this year, 15 more than previously planned, and open about 125. Store openings will focus on Gap's US Old Navy chain, with closures to include more of the core Gap stores.

At the start of this month, Swedish retailer H&M formerly took possession of the 10 former Gap stores in Germany, in a deal agreed earlier this year. Sales in the Gap International business continue to be a problem, with a 10 per cent decline across the quarter to the end of July. The company currently has 3,095 stores in total.

In the US, Gap said its summer clearance sales generated weaker than expected interest from consumers. The retailer is currently featuring Sex and the City actress Sarah Jessica Parker in a high-profile ad campaign.

Gap chief financial officer Byron Pollitt stated: "Following a strong start in May, business in June and July was challenging with traffic trends softening and monthly results disappointing. Our strategic decision to reduce overall promotional and markdown activity partially contributed to the deterioration of traffic during the quarter."
23 August 2003






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