Blog: Leonie BarrieGap on track?

Leonie Barrie | 24 August 2007

Gap yesterday showed first signs of the recovery that has dogged it for the past couple of years by posting a 19% rise in second quarter profit to $152m. It makes an auspicious start for new chief executive Glen Murphy in his first earnings report, but most of the gains have been achieved as part of an ongoing cost cutting and restructuring programme rather than through an uplift in sales. In fact, total sales slipped 1% and more worryingly, comparable store sales – a key measure of retailer’s health – were down 5% compared with the same period last year.

Gap believes recent measures, including axing around 2,200 positions during the first half of 2007, will generate annual savings of around $100m. It even went so far as to lift its full-year profit outlook. But there are only so many costs that can be cut to boost profits. Other retailers have already expressed worries that housing and credit issues, higher fuel and food costs could hurt consumer spending. And unless Gap can reverse the slumping sales that are at the core of its problems, the company could still face challenging times ahead.

Cost cutting helps Gap to 19% jump in Q2 profit


BLOG

US border tax a contentious issue

Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...

BLOG

Primark's sustainable cotton programme takes shape

With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...

BLOG

Trump administration starts to shake up trade

Last week we marked the inauguration of Donald Trump as the 45th president of the United States by taking a closer look at what's at stake for the textile and apparel trade – especially his promises t...

BLOG

Likely shifts in the sourcing landscape in 2017

Continuing our look at what lies ahead for the apparel industry and its supply chain in 2017, the panel of industry experts consulted by just-style last week tackled likely shifts in the sourcing land...

just-style homepage



Forgot your password?