April was another cringe-inducing month for Gap, Inc., and for those of us reading the apparel company's April and first-quarter sales report, released Monday evening. Gap brand fared the best last month with a sales decline of 4 percent compared to last April. Banana Republic and Old Navy saw 7 and 10 percent declines, respectively. As a whole, Gap Inc.'s comparable sales were down 7 percent, marking its 13th consecutive month of falling sales. Womp.
For the first quarter of the year, the results from which Gap Inc. will be releasing in full later this month, net sales were down 5 percent to $3.44 billion compared with $3.66 billion for the first quarter last year. As usual, Banana Republic fared the worst in the first three months of the fiscal year with an 11 percent decline.
This downward trend follows several attempts by Gap, Inc. and its CEO Art Peck (as of February 2015) to turn around its long-ailing Gap and Banana Republic brands (whose poor performance was usually offset by the once-prosperous Old Navy) on the product side as fast-fashion chains have eaten away at its market share. New creative directors — Rebekka Bay at Gap and Marissa Webb at Banana — were hired in 2012 and 2014, respectively. In 2015, Bay's role was eliminated while Webb stepped down to become an adviser. Speaking to analysts last June, Peck said the company's foremost problem was product that didn't resonate with consumers, and that it was implementing steps to improve this. He noted that the improvements wouldn't be felt until this spring, and the aforementioned sales results prove those steps weren't as effective as the company hoped they would be.
So what will Gap do now? The company said in Monday's press release that it "will take steps to better position the company for improved business performance," including finding ways to "streamline its operating model" (which could likely mean layoffs) and "evaluating its Banana Republic and Old Navy fleets, primarily outside of North America, in order to sharpen its focus on geographies with the greatest potential" (presumably, that means store closures). “We are committed to better positioning the business to recapture market share in North America and to capitalizing on strategic international regions where there is a strong runway for growth,” said Peck in a statement. Gap execs will likely go into greater detail on this on May 19, when the company releases its full first-quarter earnings and addresses investors and analysts in a conference call.