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Sales slide 8% at Gap

Sales at US casualwear giant Gap dropped 8% last month. In the four weeks to November 3, total sales at the retailer fell to US$1.23 billion (£590 million) from US$1.24bn (£600m) the previous year.
Like-for-like sales at Gap’s North American stores fell by 7%, while sales at the company’s Banana Republic and Old Navy businesses dropped by 2% and 11% respectively.

International sales, which include UK and France, slipped by 6%, compared with a fall of 8% last year.

Gap finance executive vice- president Sabrina Simmons said: “While comparable store sales were down in October, merchandise margins were significantly higher than last year. The results reflect our stated strategy of managing the inventory tightly to support margin improvements.”

Like-for-like sales for the 13 weeks to November 3 dropped by 5%, the same as in 2006.

Gap’s North American arm recorded a 6% drop in sales over the same period, Old Navy’s sales fell 8% and Banana Republic rose 1%.
Sales at international stores declined by 4% in the 13 weeks to November 3, compared with a drop of 6% last year. Net sales for the quarter remained flat at US$3.85bn (£1.85bn).

In August, Gap appointed former Timberland retail director Michael Stanier as vice president and managing director of its UK retail and European franchise operations, heading the business’s 140-store UK arm (Drapers, August 25).

Stanier is likely to lead a review of Gap’s portfolio, and it is thought that about 10 of its UK stores have already been put up for sale.

However, he is also expected to grow Gap’s operations in Turkey and Saudi Arabia, where the business has signed a franchise deal and plans to open more than 100 stores.

Gap will also launch its first UK concession for menswear, womenswear and kidswear next year at House of Fraser’s store in Victoria, west London.

A Gap kidswear concession recently opened in HoF’s store on London’s Oxford Street. Its first adult concession opened this week at HoF’s store in London Victoria. Gap will report sales on December 6.

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