Old Navy Drives Sales Improvement for Gap

Gap Inc. (San Francisco) announced net sales for the third quarter ended October 31, increased 1 percent to $3.59 billion, compared with $3.56 billion for the same period last year. The company’s comparable store sales were flat compared with a 12 percent drop last year. Among its brands, Old Navy was the only division to report same-store sales growth, at 10 percent. Gap North America saw its same-store sales drop 7 percent, while Banana Republic and international comparable store sales were both down 6 percent.

“We’re pleased with our third quarter results, particularly our ability to deliver earnings 25 percent above last year and our highest third-quarter operating margin in a decade,” says Glenn Murphy, chairman and ceo. “Looking ahead to the holiday season, we’re focused on gaining market share as we invest in marketing and present a strong value proposition to customers across our brands.”

The apparel and accessories retailer expects to open 50 stores and close 100 locations during fiscal 2009, which will account for a 2 percent decline in net square footage compared to last year.

In related news, the company announced it will again partner with designer Stella McCartney on a second collection, to hit select GapKids and BabyGap stores and online in March 2010.

“We’re pleased and encouraged by the response to our first collection working with Stella,” says Marka Hansen, president of Gap brand. “The combination of her unique aesthetic and our brand’s experience in childrenswear has resonated with our customers around the world, with certain styles including the Miller jacket being a sellout success. We’re thrilled to be working with Stella on a spring collection.”