Gap Inc first quarter sales down 43%
Gap has posted a 43% drop in first quarter net sales as a result of the impact of the coronavirus pandemic on retail.
The owner of the Gap, Old Navy, Athleta and Banana Republic brands said stores sales in the three month period ending 2 May dropped by 61% due to 90% of its worldwide store estate being closed from 19 March following the outbreak of Covid-19.
Meanwhile, online sales climbed by 13% in the period.
Looking at the individual brands, net sales at Gap were down 50% in the quarter while Old Navy sales dropped by 42%. Sales at Banana Republic and Athleta fell by 47% and 8% respectively.
Sonia Syngal, president and chief executive of Gap Inc, said: “Our teams’ ability to pivot quickly and lean into our strong online business resulted in an encouraging 40% online sales growth in April.
“While net sales and stores sales continued to reflect material declines in May as a result of closures, we saw over 100% growth in online sales during the month. This online momentum, enabled by new omni-capabilities that have expanded the way customers can shop with us, leaves us well-positioned to fuel our brands going forward.”
During the quarter, the company implemented several measures to strengthen its cash position and secured additional financing early in its second quarter to help it weather the pandemic. It is also planning to reduce its capital expenditure for the current financial year by approximately 50%.
Gap Inc now has more than 1,500 stores open in North America following the easing of Covid-19 restrictions.
Syngal added: “We expect to have the vast majority of our North American stores re-opened in June. We are optimistic that the actions we’ve taken will provide a stable foundation as we navigate near-term uncertainty and refashion Gap Inc for long-term growth.”
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