Sales dip shows Gap between retailer and rivals
BIG clothing retailer Gap reported another quarter of declining sales on Tuesday, a sign of deepening trouble in its battle to keep up with fast fashion and online retailers.
The 47-year-old apparel maker, known for its trademark blue denim, khakis and youth-oriented looks, saw sales fall at all three of its store brands - Gap, Banana Republic and Old Navy.
Key challenges for all three include competition from H&M, Uniqlo and other fast fashion chains, as well as the headwinds from a broader tilt against brick-and-mortar stores as more shoppers go online.
Gap, which a year ago announced plans to cut 175 namesake stores in North America, pledged renewed focus to streamline operations and whittle its presence globally to the most promising markets.
Wall Street's reaction was brutal, with shares plunging 12.4 per cent in early afternoon trade to US$19.11.
Credit Suisse questioned Gap's emphasis on cutting its overseas footprint, noting stores outside North America make up less than 5 per cent of the total.
"We feel like more attention should be focused on rationalisation in North America where the company owns 2,600-plus stores," Credit Suisse said in a note.