The Gap Outlines Turnaround Plan
Friday, September 8th 2000, 12:00 am
By: News On 6
NEW YORK (AP)â€” After a series of missteps that culminated in a 14 percent decline in same store sales in August, The Gap Inc. believes it can reverse its fortunes by better managing its branding and pricing.
Speaking at the annual Goldman Sachs Retailing Conference in New York, The Gap's chairman and CEO, Millard Drexler, said he is focused on bringing ``discipline'' back to the San Francisco-based retailer of men's and women's casual clothing.
The company's disappointing second-quarter earnings report, released last month, showed a 6 percent decline in earnings.
``We were complacent, even though we are not a complacent company,'' Drexler said Thursday.
One of the company's main priorities, he said, is to revitalize Old Navy, its most troublesome division, as ``a family store.'' Old Navy has put too much emphasis on young trendy clothing, ignoring the older customer, he said.
``We love teen-agers but we need to expand our appeal,'' he said.
Drexler said advertising for Old Navy will be expanded for the upcoming holiday season. The company partly attributed its lackluster August sales to a shortage of advertising for the back-to-school season.
Drexler said the cost of Old Navy apparel will also become more competitive. ``We were a little sloppy with pricing,'' he said.
As for The Gap, the flagship division will add a mix of trendy items and basics, such as gabardine pants and khakis.
The retailer is also rolling out Gap and Old Navy credit cards, a service it already offers for customers of its Banana Republic division.