Although The Gap believes it can change its financial tune, some have their doubts. After dim fourth-quarter reports (that noted a 34 percent profit decline), Gap CEO Millard ÒMickeyÓ Drexler was optimistic that the San Francisco retailer could improve its standing by the second half of its fiscal year. Investors responded by driving down the stock by 8.7 percent (to $23.81 per share) on Friday afternoon.
Reportedly, the retailer has waffled in its comeback strategy. In 1999, The Gap said it would expand product lines to appeal to adults, but on Friday, Drexler pinned weak sales on going Òtoo broad.Ó Last spring, the retailer stated it would slow down merchandise movement to avoid the pitfalls of frequent price-slashing to clear space for incoming merchandise. Now, itÕs committed to moving in more clothing faster. Last week, the company announced its decision to increase spending for TV advertising, despite Fall, 2000 plans that entailed saving money in this area.
DrexlerÕs new plan involves setting a fresh interior tone with the fast flow of products and specifically eyeing the 20- to 30-year old market.