NEW YORK – US fashion retailer Gap has posted net sales of US$3.55bn, down 8 per cent compared to last year, with comparable sales down 6 per cent. Gap is a portfolio of billion-dollar lifestyle brands including Old Navy, Gap, Banana Republic, and Athleta. It is the largest specialty apparel company in the US and, as such, its latest poor trading figures offer a decent indication of difficulties facing the mainstream US fashion segment.
Store sales decreased 7 per cent compared to last year at Gap and the company ended the quarter with 3,456 store locations in over 40 countries, of which 2,592 were company operated.
Online sales decreased 11 per cent compared to last year and represented 33 per cent of total net sales.
The trading figures, which were well below analyst estimates, illustrate the challenging trading environment and growing threat of online players such as Shein.
“I have long admired Gap Inc. as a customer, a brand builder, and most recently, as a board member. An even greater draw is the company’s storied brands. And I’m excited for the opportunity to lead the incredible people of Gap Inc. to unlock our full potential,” said Richard Dickson, president and chief executive officer, Gap Inc, attempting to put a positive spin on the poor figures.
“We’re seeing encouraging signs of progress, as our teams streamline the way we work so we can focus on growth-driving initiatives – a virtuous cycle that we’ll look to become our norm,” added Dickson.
Gap’s gross margin of 37.6 percent increased 310 basis points versus last year’s reported gross margin and increased 160 basis points. Reported operating income was US$106m, while its operating margin was 3 per cent.
The company reported adjusted operating income of US$119m and adjusted operating margin of 3.4 per cent.
