Gap Goes Back To Basics In Yet Another Bid For Growth

Art Peck, chief executive officer of Gap, made a bold promise last June at an investor meeting in San Francisco. Spring 2016, he said, would mark a fresh start for the company and its flagship brand, a turning point from sales declines and a two-year slump. He assured the audience that he and his top executives were focused on delivering results and new products. “Spring is a no-excuses moment,” Peck said, “particularly in the women’s business.” Ten months later, the transformation has yet to materialize. Sales have continued to disappoint. Optimism from better-than-expected results in February disappeared by the time March figures were reported. Comparable sales at Gap stores open at least a year and online have declined for the past eight quarters. With more inventory on hand than expected in April, the company will need to aggressively discount prices to sell the goods. Analysts and investors question whether Peck and his team have a plan and wonder just how much trouble the company is in. “Spring was supposed to be a blockbuster quarter for them,” says Simeon Siegel, an analyst with Nomura Securities, “and it didn’t materialize.” Read more at Bloomberg.