Gap Grows as Consumers Buy Clothes
Eli Portnoy, chief brand strategist of Portnoy Group, is
among those who are having trouble rationalizing sales growth at retail apparel
chains and some of the more troubling aspects of the current
economic picture, such as high unemployment.
"It is a baffling situation; the only thing I can attribute it to is
we’re a consuming economy," Mr. Portnoy told the Los Angeles Times. "We
like to buy stuff and we can only be in withdrawal for so long in this country."
Inc. was one of the beneficiaries of consumers’ willingness to spend as the
company announced that sales grew across all its banners for the first quarter
and profits were up 40 percent versus the same period a year ago.
"We got off to a great start this year by improving our top line and
delivering significant earnings growth," said Glenn Murphy, chairman
and chief executive officer of Gap Inc., in a press release. "Fueled
by our strengthened economic model, we’re in a strong position to execute
on our international and online strategic investments as we continue to build
upon the momentum in North America."
Comparable store sales were up four
percent for the company. Gap same-store sales in North America were up two
percent, Banana Republic increased five percent and Old Navy achieved a seven
Tom Wyatt, president of Old Navy, credited a new format with
helping the chain to achieve such strong results.
"We’re reacquiring a lot of customers that we lost," he told Bloomberg
Discussion Questions: Are there common factors that Gap and other clothing
retailers share that have led to their recent successes? What clothing retailers
are you most impressed with at the moment?
- Gap Inc. Reports First Quarter Earnings Per Share Up 45% – Gap Inc.
- Gap Inc. earnings rise 40% – Los Angeles Times
Raises Annual Profit Forecast as Sales Climb – Bloomberg News
Retailers Report Stronger Earnings – The Wall Street Journal