Blog: Leonie BarrieMind the Gap

Leonie Barrie | 1 September 2006

“Challenging” and “disappointing” are words becoming all-too-familiar at Gap Inc. While the retailer continues to talk of a turnaround, initiatives such as its new store layout and changes to its product lines come and go without seeming to make a dent in its sluggish sales.

Last month we heard how the retailer had focused on clearing merchandise – with price cuts inevitably eating into profits – to make way for the new autumn clothing lines that arrived in stores in late July. Then in August, when consumers were expected to have been loading up on the new lines, Gap’s same-store sales fell by a further 7%, a much worse decrease than the 3.4% drop analysts had expected.

Alarmingly, the declines came in a month of strong sales for skinny jeans and back-to-school fashions – which should be the backbone of Gap’s business – at competitors such as American Eagle Outfitters, Aeropostale and Abercrombie & Fitch.

Whether or not its newly revamped stores and ranges will spur financial improvements in the second half of the year remains to be seen, but surely patience among analysts and investors must be wearing pretty thin by now?

August retail roundup


Asia facing up to increased competition

Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too. And it is pushing...


Cambodia raises garment worker wages

The monthly minimum wage for workers in Cambodia's textile, garment and footwear sector is set to rise to $153 from January next year, following a vote on the issue last week. The increase marks a ris...


Sportswear initiatives start to take shape

The results of two highly-anticipated initiatives in the sportswear sphere were revealed last week: the launch of Under Armour’s new UAS lifestyle brand and the first pair of running shoes created at ...


Hanjin Shipping collapse triggers fear of West Coast port repeat

The recent bankruptcy of South Korea's Hanjin Shipping, the world's seventh-largest container shipper, at the end of August, has left billions of dollars worth of merchandise in limbo, leaving the fal...

just-style homepage

Forgot your password?