Gap, Inc. Plans For Tough Retail Environment
Posted on February 27, 2009Gap Inc. and Limited Brands, Inc. have both posted lower fourth quarter profits. But both companies have implemented cost cutting measures and have plenty of cash, and say that they are positioned to survive the tough retail climate. The CEO of Gap told reporters that foot traffic is the company's biggest problem.
As Glenn Murphy, Gap's chairman and chief executive officer, said on a conference call, "I'm pleased with our results," adding he was "very proud" of Gap's 150,000 employees. "It was a good year in a tough economic environment." Still, he said traffic in the stores has been the corporation's "Achilles' heel" for a number of years.Gap Inc. and Limited Brands, Inc. are America's two biggest apparel specialty store chains.
In a snapshot review of each Gap division, he said he felt "pretty good about the Gap brand" and he commended the two-year-old team there for bringing the product back closer to the aesthetic for which Gap is known. He said GapKids continues to perform well, gapbody was completely redone in the last six months under the direction of Patrick Robinson, and, at Old Navy, "there's some light at the end of the tunnel, despite horrific January [sales.]" Old Navy, he said, has a better balance between seasonal basics and fashion, and its value message is coming out much clearer. "It's positioned as fun fashion for all. It is starting to get better, but still has a very long way to go."