Political unrest sweeping across the Indian Ocean island of Madagascar could lead to merchandising problems at Gap Inc, the US's largest apparel chain an analyst said yesterday.

The unrest, which erupted about a month ago after opposition leader Marc Ravalomanana claimed that voting had been rigged, has led to daily protests that have brought parts of the country to a standstill.

Todd Slater, an analyst at Lazard Freres & Co, told Reuters that Gap may face shipment and production delays if the political unrest continued longer.
"There could be more meaningful risk to (Gap's) spring season should the political unrest intensify or endure months instead of weeks," Slater said in a note sent to Reuters.

Jamey Edgerton, a Gap spokesman, confirmed that the company sourced "basic" items such as T-shirts and jeans from Madagascar, but said the San Francisco-based company would also be able to source goods from elsewhere.

"Madagascar is a very small percentage of our sourcing," he said, without giving specific details.

But Slater added that Gap may suffer more problems from what he described as a "flat, dark, overpriced" spring clothing line which has already shipped to stores.

Gap's credit rating was yesterday downgraded to junk status yesterday, prompted by warnings about the struggling retailer's deteriorating financial condition.

Both Standard & Poor's and Moody's Investor Service concluded the struggling retailer is likely to remain mired in a 21-month slump in sales.