NEW YORK - Changes may be underway at Gap for its Gap and Old Navy brands.
The specialty chain on Thursday posted a 4 percent drop in December sales to $2.34 billion from last year’s $2.44 billion. Same-store sales fell by 8 percent on top of a 9 percent decline a year ago.
The bright spot was Banana Republic, which posted a 2 percent gain against last year’s 5 percent decline.
“We are clearly disappointed with Gap and Old Navy’s holiday sales and overall performance for the year,” said Paul Pressler, president and chief executive officer of Gap Inc. He added, “Given that we did not gain the traction we had expected, the management team, with the active involvement of our board of directors, is currently reviewing Gap and Old Navy’s brand strategies. We are committed to making the necessary changes to improve performance.”
"Although Banana Republic continued to make good progress in its turnaround, we continued to experience negative traffic trends at Gap and Old Navy," said Sabrina Simmons, senior vice president, corporate finance, Gap Inc.
Simmons explained that due to weak traffic trends, the company conducted promotions and markdowns at the two brands, which is expected to drive overall merchandise margins “significantly” below last year.
For complete coverage see tomorrow's issue of WWD.
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