Gap sales drop 4 %
In trouble for a while, GAP has not been able to turn the tide in the third quarter with its turnover down 3 % to 3.86 billion dollars (3.61 billion euro). Based on the same amount of stores, the drop would only be 2 % and looking at the separate brands, Gap dropped 4 %, Banana Republic plummeted 12 %, but Old Navy stood its ground with a 4 % turnover increase.
The expensive dollar was partly to blame, with particularly its Canadian and Japanese activities suffering. 23 % of Gap’s third quarter turnover was generated abroad.
The company also had to deal with the consequences of several wrong fashion decisions, particularly when it comes to women’s fashion. Competitors like H&M, Forever 21 and Zara took full advantage and welcomed plenty of new customers. On top of that, Gap’s wholesale margin also dropped from 40.2 % to 37.3 %.
In a previous statement, Gap informed it would update its distribution system, choosing to downsize to a smaller and better network. The brand is on sale in 3,300 stores of its own, 400 franchise stores and several online platforms worldwide.
