Gap Inc., owner of the Banana Republic, Gap and Old Navy clothing chains, said late Thursday that earnings fell by more than 50% in the second quarter due to flats sales and ‘aggressive” discounting.
For the quarter ended in July, net income dropped to $128 million from $272 million in the same period last year. Sales were flat at $3.7 billion.
Each of the company’s brands is “at a different stage in its turnaround,” Gap president and CEO Paul Pressler said in a conference after the results were announced. “We are encouraged by improved performance at Banana Republic and our online division. And while we are making progress at Gap and Old Navy, we know it will take several seasons of consistent product, marketing and store improvements to win back our customers.”
While much of the marketing discussed in the conference involved TV spots, particularly a flight for Gap featuring celebrity names such as Aaron Eckhart and Jeremy Piven, Pressler said the company has increased direct-marketing spending at all its brands, including a new fall preview mailing for high-end Banana Republic customers.
