Gap Inc on Thursday said its same-store sales for August 2004 fell 1 per cent compared with a 4 per cent increase in August 2003.

The San Francisco-based retailer reported net sales of $1.23 billion for the four-weeks ended 28 August 2004, up 1 per cent rise from $1.22 billion a year earlier.

By division, the company said same-store sales at Gap US were flat and dropped 10 per cent at international locations. Banana Republic sales were flat and at Old Navy they fell 1 per cent.

"Although August started slowly across divisions, we saw solid performance in key fall items such as women's fashion denim at Gap, pants at Banana Republic and the featured blazers for women at Old Navy," said Sabrina Simmons, senior vice president, treasury and investor relations.

"Overall merchandise margins were consistent with last year."

Year-to-date net sales for the 30 weeks ended 28 August were $8.6 billion, a 4 per cent increase over last year's $8.3 billion. The company's year-to-date comparable store sales increased 3 per cent compared with a 10 per cent increase in the prior year.

In a separate statement, Gap said it has successfully completed a $750 million five-year unsecured revolving credit facility, replacing a three-year secured facility.

The company is also exercising the option to retire the remaining $122 million in debt from its 2005 maturity during the third quarter 2004.

As a result, the company expects to incur about $0.01 per share, or $10 million, in loss on early retirement of debt during the third quarter.