Gap Plunge Continues

The news got worse for The Gap, Inc. It announced that August same store sales would decline 14 percent from a year ago, across the board – unexpected not only to investors and industry analysts but evidently to the giant San Francisco-based company itself. Previously high-flying Old Navy suffered a 20 percent decline – its second dramatic quarterly downturn in a row – and sales at Gap stores and Banana Republic also fell, though the company would only report that those decreases were ’n the “mid-single digits.”

Gap blamed the drop on a cutback in consumer spending; on the failure of its back-to-school apparel to better attract the market; and on the marketing shift away from television and toward in-store marketing and promotion. “It did not succeed as well as we had hoped,” said president and ceo Millard Drexler. Look for a lot of Gap TV ads for the holiday season.