Gap Inc(NYSE: GPS) stock rallied over 4.8% on September 6th, 2017 (as of 11:56AM EDT; Source: Google finance) leading to an increase of 14% in the last three months. For the Second Quarter of 2017, Comparable Sales rose 1% as compared to a 2% decline in the prior corresponding period. Old Navy Global reported a positive 5% rise against the flat performance in the prior corresponding period. Gap Global performance was negative 1% against negative 3% in same period last year. Banana republic fell 5% but better than 9% fall in the same period last year
The group intends to continue to focus on their growth brands, while forecasts Old Navy to exceed $10 billion and Athleta to exceed $1 billion in net sales in the next few years, boosted by online as well as mobile channels, U.S. store expansion, and ongoing market share leadership in loyalty categories. GAP intends to expand their investment in Online and Digital which delivered a double-digit sales growth. Their sites are built on a proprietary e-commerce platform that enables wide-ranging capabilities, including cross-brand shopping, omni-channel services, and an upcoming buy online, pick-up in store service, as well as a new personalization engine powered by customer data. The group intends to develop direct fulfillment capacity, loyalty, personalization, omni-channel services, artificial intelligence and other data-driven customer experiences in the next three years.
Despite the booming online business, Gap still intends to add about 70 net new stores in the next three years, with the addition of about 270 Old Navy, Athleta and value expressions across their portfolio. But the group intends to close over 200 underperforming Gap and banana republic specialty locations.
The group is aiming over $500 million in expense savings in the next three years via cross-brand synergies and streamlining operations and processes while maintaining growth initiatives, and margin expansion.