Reports of Gap’s early demise may have been exaggerated. The no. 1 clothing retailer in the US posted a 51% increase in profit on tighter cost controls and inventory management. Amid all the success there were some ominous signs. Same store sales (stores that have been open at least a year) have posted at least a 10% decline and overall a 5% decline. Gap is looking at folding their Baby Gap and Gap kids stores into the adult Gap stores to trim expenses. Analysts chimed in that some fashion missteps from Gap led to customers seeking items from competitors like H&M and Target.
Gap’s turnaround efforts include hiring designers Patrick Robinson and Todd Oldham to reinvigorate the Gap and Old Navy lines. Another initiative put into place is cross shopping through their online stores. Gap now allows checkouts across all brands: Banana Republic, Gap, Piperlime, Old Navy through one shopping cart and with flat rate shipping. Online sales rose 11% as a result.