Gap Power

The Gap Inc. (San Francisco) has announced a doubling of its earnings in 2003 and the naming of a new senior vp for Gap adult and body merchandising.

Julie Rosen will oversee merchandising for men's and women's apparel, accessories and GapBody assortments for the Gap U.S. division. She had been senior vp, merchandising, for the Banana Republic division. She will report to Gary Muto, president of Gap U.S.

For the fourth quarter of fiscal 2003 ending Jan. 31, 2004, Gap’s net sales increased 5 percent and same-store sales increased 3 percent. (In the fourth quarter a year ago, same-store sales had been up 8 percent.)

For the full fiscal year, in addition to its earnings boost, net sales were up 10 percent and same-store sales were up 7 percent. (In fiscal 2002, same-store sales declined 3 percent.)

“We achieved strong earnings performance in 2003 by better understanding and serving our customers and improving our operating discipline,” said Gap Inc. president and ceo Paul Pressler. “We also significantly improved our cash flow and lowered our debt, which puts our company in a healthier financial position to further strengthen our brands and to begin funding longer term growth opportunities.”

By division in fiscal 2003, Gap U.S. had a sales increase of 3 percent and same-store sales increase of 7 percent; Gap International had a sales increase of 17.6 percent and same-store sales increase of 6 percent; Banana Republic had a sales increase of 10.5 percent and same-store sales increase of 7 percent; and Old Navy had a sales increase of 12 percent and same-store sales increase of 8 percent.

The retailer decreased the net square footage of its real estate by 2 percent in 2003, ending the year with 3022 stores. It had a net loss of 71 Gap stores in the U.S. and 16 internationally. The Banana Republic chain dropped six stores and the Old Navy chain two. The company said it expects capital spending to increase nearly 84 percent in 2004, primarily to fund new and existing stores and information technology. But it said it expects net square footage to remain flat for 2004. It expects to open 15 new Gap stores in the U.S., but close 85. The expectation is also for 30 new Banana Republic stores and five closings; and for 70 new Old Navy stores and 20 closings.