Gap posts surprise jump in sales as online business doubles
Fashion retailer Gap posted a surprise jump in quarterly sales as its online business almost doubled due to consumers buying comfortable “stay at home” clothes during the coronavirus pandemic.
The US firm said same-store sales were up 13 per cent in the second quarter, compared to analysts’ forecast of a 20.97 per cent drop.
The retailer’s online business almost doubled in the quarter ended 1 August and added about 3.5m new customers.
“We won in the value space with Old Navy, and we won in the premium space of Athleta,” chief executive Sonia Syngal said, according to Reuters.
The firm sold about $130 million worth of face masks during the period.
The company expects demand for its Old Navy and Athleta brands to continue to drive sales.
However it is preparing to close more than 225 unprofitable Gap and Banana Republic stores globally as a part of its restructuring plan.
Gap posted a net loss of $62m in the quarter compared to a profit of $168m the previous year. Net sales plunged 18 per cent to $3.28bn, but beat expectations of $2.91bn.
“Our strong performance in the second quarter reflects the customer response to our brands, products and experiences, particularly as we’ve rapidly adapted to the changing environment.
“We nearly doubled our ecommerce business, with approximately 50 per cent online penetration, demonstrating our ability to pivot to a digitally-led culture,” Syngal said.
“I’m confident that our purposedriven lifestyle brands, size and scale, and advantaged digital capabilities are helping us win now and position us for growth in the future.”