The retailer saw sales slip at its largest Old Navy division

The retailer saw sales slip at its largest Old Navy division

An unexpected fall in sales at its largest Old Navy division, coupled with the impact of a fire at its Fishkill distribution centre in the summer, pushed US specialty apparel retailer Gap Inc to another drop in comparable sales for November.

The San Francisco-based retailer, which operates 3,300 stores, posted a 1% drop in comparable sales last month, although this was smaller than the 8% fall last year.

The company estimated the fire at its Fishkill distribution centre in August negatively impacted November comparable sales by around 3 percentage points. It added that most of the fire-related negative impact to fourth quarter comparable sales occurred in November.

By brand, comparable sales in November fell 3% at Gap Global, rose 5% at Banana Republic, and slipped 2% at Old Navy.

Gap Inc said all divisions were negatively impacted by the fire, and that it calculated the estimated impact by applying the forecast merchandise margin rate before the fire occurred to the units the company believed would have been sold in November.

Net sales, meanwhile, dropped 2.5% to $1.53bn compared with $1.57bn in the same month last year.

"While November traffic trends remained challenging, we are encouraged that performance improved in the back half of the month and we remain focused on executing our holiday plans," said Sabrina Simmons, chief financial officer, Gap Inc.

The lost sales and increased logistics costs from the fire "will likely be offset by higher merchandise margin, although merchandise margins will likely be negatively impacted by increased promotions in efforts to win holiday sales in a highly competitive retail environment," noted Stifel analyst Richard Jaffe.

Click on the following link to see how other US apparel retailers fared in November.

US apparel retailers' November 2016 sales roundup