LONDON (Brand Republic) – New advertising for clothes retailer Gap is pulling more people into its stores and having a positive effect on sales, according to the company.
The news is a glimmer of hope for Gap, which is struggling to meet its profit expectations and warned of further threats to earnings throughout the Christmas season.
The retailer, which also owns Banana Republic and Old Navy stores in the US, has been forced to offer deep price cuts to clear backlogs of unsold autumn clothing. While this strategy has increased store traffic, it has damaged profitability.
Earlier this month, Gap issued a profit warning with its third-quarter results. Same-store sales were down 8% with overall sales totalling $3.41bn.