Apparel chain Gap said it would shut more stores than forecast previously and that it expected a further drop in traffic during the crucial holiday shopping season. "Given that challenging traffic trends have continued, we are investing meaningfully in marketing across our portfolio brands during the holiday season," outgoing Chief Financial Officer Sabrina Simmons said on an earnings call.
Gap said it now expected to shut about 65 company-operated stores this year, compared with its previous forecast of about 50 stores. Traditional apparel chains are struggling with the growing popularity of online retailers and fast-fashion chains such as H&M, Forever 21 and Inditex's Zara, which are known for offering trendier clothes at cheaper prices.
The company, which reported its seventh straight quarterly sales decline in the three months ended Oct. 29 as demand for its Gap and Banana Republic brands remained sluggish, has been trying to replicate the success of its low-end Old Navy brand at its Gap and Banana Republic chains since Art Peck took over as chief executive last year. Its net income fell to $204 million, or 51 cents per share, in the third quarter ended Oct. 29 from $248 million, or 61 cents per share, a year earlier. Net sales fell to $3.80 billion from $3.86 billion.
(Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Anil D'Silva)