NEW YORK — Memo to Wall Street: Gap Inc. is working on its problems.
The company reiterated its aggressive posture on Wednesday, outlining plans to improve its sagging sales and shareholder value by maximizing its sourcing to get products into stores faster.
But Byron Pollitt, the chief financial officer of the San Francisco-based specialty retailer, admitted to attendees at the S.G. Cowen & Co. investor conference here that the initiatives will take time to win back shoppers.
"We are maniacally focused on delivering [customers] amazing product, executing flawlessly our store experience and driving traffic through strong, competitive marketing campaigns," Pollitt said. "We are confident that, with a steadfast laser focus on these initiatives, we will win back our customers the old-fashioned way, one season at a time."
Investors liked what they heard and sent shares of Gap up 3.8 percent to $18.15 in trading on the New York Stock Exchange. It was the stock's highest close in nearly a month. Gap shares have lost about 16 percent over the last 52 weeks and opened 2005 at around $21.
Pollitt's remarks, however, essentially echoed those of president and chief executive officer Paul Pressler during the company's November earnings conference call. After reporting a 20 percent decline in third-quarter earnings to $212 million from $265 million on sales that dropped 3 percent to $3.86 billion, Pressler said the company was committed to focusing on the three fundamentals of retailing: product, store experience and marketing. Pressler also admitted in November that the company had been so focused on building infrastructure and operating efficiencies over the past two years that it had neglected creating "amazing product and compelling store experience."
Pressler has said he doesn't expect to see positive results from the company's refocus on its "fresh casual American-style" design aesthetic until this spring. And several analysts who follow the company don't expect to see positive results until fall.
Within its focus to improve customer conversion rates, Pollitt said Wednesday that Gap will specifically improve speed-to-market capabilities by working more closely with vendors and adding more sourcing capabilities in North America. The moves are aimed at more effectively reacting to consumers' acceptance of new collections.
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