Blog: Leonie BarrieA colourful start for Gap

Leonie Barrie | 21 May 2012

One of the bright spots - quite literally - in the first three months of Gap Inc's new financial year has been the success of its spring collection, which helped lift sales by 6% and prompted CEO Glenn Murphy to say the firm now has a "small win" to celebrate.

Not only was revenue at stores open at least a year up 4%, but gains of 5% were seen at both the Gap and Banana Republic units, while Old Navy rose 4% during the three months to 28 April. Net sales rose 6% to $3.5bn - and the company raised its guidance for the year.

But profit in the quarter was flat with last year at $233m thanks to higher marketing and operating costs, and international comparable sales fell 4%.

But it wasn't such a good week for footwear firm Skechers USA, which is to pay $50m to settle "unfounded" advertising claims that its toning shoes would help wearers improve their fitness and lose weight. The agreement comes eight months after sportswear maker Reebok International also said it would pay $25m in customer refunds for making similar claims about its toning footwear.

In other news, official data showed that sales at US clothing stores softened in April, making this one of the weakest sectors during the month. However, the results come after retailers saw sales brought forward to February and March on the back of unseasonably warm weather, an earlier Easter holiday and rising consumer confidence.

Other data showed that US imports of apparel and textiles were up 1.7% by volume in March. But while textile imports were up 7% to 2.35bn SME, apparel imports fell 4.9% to 1.66bn SME. The declines were led by the largest supply country, China, which saw its total figure fall by 3.7%.

While China's textile and garment export growth in the first quarter of this year has slowed from the double-digit figures posted in 2011 - plans are also afoot to double textile output by 2020.

One of the hot conversation topics at the recent Texprocess Americas technology show in Atlanta was the prospect of some sewing operations returning to the western hemisphere. But while suggestions that reshoring, or bringing back production jobs lost to China, could be nothing more than a symbolic gesture, there is still a need for businesses in developed countries to provide a range of sewing services.


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