SAN FRANCISCO -- Encouraged by recent robust earnings reports, Donald G. Fisher, chairman and chief executive officer of The Gap, told shareholders at the annual meeting Tuesday that the company's volume would reach $7 billion in 1997. Last year, the...
SAN FRANCISCO -- Encouraged by recent robust earnings reports, Donald G. Fisher, chairman and chief executive officer of The Gap, told shareholders at the annual meeting Tuesday that the company's volume would reach $7 billion in 1997. Last year, the company had sales of $3.3 billion.
In addition, Fisher expects earnings to increase at an annual rate of 15 to 20 percent for the next several years.
The meeting, held in the Sheraton Palace Hotel here, was upbeat for The Gap, with Fisher speaking for 15 minutes, longer than his five-minute speeches of recent years.
Fisher said the company's four divisions -- Gap, Gap Kids, Banana Republic and Old Navy Clothing Co. -- would all contribute to the growth, but said Old Navy has the greatest potential for international growth. The company currently operates 48 Old Navy stores, which offer merchandise similar to The Gap's but at prices 30 percent lower. In the last three months, Fisher said, the company built and opened eight Old Navy units. The other 40 units were conversions of Gap Warehouse stores, which have been phased out.
Future Old Navy stores will be in strip centers and will compete directly with such off-price and discount stores as Target, Mervyn's, T.J. Maxx and Marshall's.
Fisher's enthusiasm for Old Navy was apparent the minute stockholders arrived at the meeting, when they were handed directions to the Old Navy store in Colma, Calif.
Fisher said the company will continue its international push and announced that next year, for the first time, it will open four to five stores in Germany and enter Japan.
This year, new stores will be opened in Canada and England -- Fisher did not specify how many -- and there will be four to five new stores in France. In 1993, the company had a total of 100 stores in those three countries.
Fisher also discussed some of the new directions the other divisions are taking The Gap division will add 50 stores and expand 50 stores this year. Currently, there are 761 units. Fisher said the company is looking to reduce the cost of "where we buy" while maintaining the same retail prices, thereby improving margins.Banana Republic will continue its move from basics to more fashionable offerings, including women's jewelry. Fisher said the store now competes with Ralph Lauren and Brooks Bros., but with more moderate prices because of its vertical operation.
There are 179 Banana Republic stores and 25 will be added this year.
Gap Kids, which has 279 stores now, will open or expand 75 stores this year. Fisher said Gap Kids is continuing to develop its own style instead of being a "shrunk-down Gap."
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