One of Gap Inc.'s more critical independent analysts, Jennifer Black of Jennifer Black & Associates, changed her outlook on the retailer and now predicts the company is about to make a significant comeback.
NEW YORK — One of Gap Inc.'s more critical independent analysts, Jennifer Black of Jennifer Black & Associates, changed her outlook on the retailer and now predicts the company is about to make a significant comeback.
Last month, Black forecast that the San Francisco-based specialty retailer would see a 3 to 5 percent decline in sales. She was also skeptical Gap executives would be able to fix merchandising missteps. And despite a poor performance in the first quarter, with a 16.8 percent decline in net income and a dip in sales to $3.44 billion from $3.63 billion, Black said on Thursday that Gap is on the right track to regaining its place in the specialty retail sector.
"I saw the product at all three divisions and it is very visually appealing," Black said in her report.
Black praised Old Navy for moving away from commodity-based retailing and presenting a higher-quality product that includes more specialty items and more core items with special touches.
"They are not just trying to compete in price," she said. "The quality of their product is improving, but point price is not rising."
Gap stores also are making noteworthy changes in merchandising, marketing and product selection. By separating their clothing lines into four key categories — denim, active, clean and T-shirt — Black says shoppers will have an easier time finding the products they want.
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