Gap sees profits rise after cost-cutting exercise
Gap, the high street clothing retailer, has reported a 51% rise in profit, despite disappointing sales across its brands. It attributes the rise to cost-cutting across its brands, which also includes Banana Republic.
It has reported a rise in net profit from $152m (£81m) to $229m (£123m), despite sales falling 6% on its North American and international divisions. International sales dropped from $412m (£221m) to $373m (£200m) over the period. Sales also fell by 6% at Banana Republic in the US, while Old Navy saw a 16% decline.
As part of its cost-cutting, Gap has announced job cuts at the start of this month. The retailer has restructured its European marketing and design teams as part of a move to centralise its teams. It has retained a reduced marketing team in London that will focus on e-commerce and store expansion, but advertising will be handled from the US.
Its European-designed team was set up in 2006 to create products specific to the UK market, launching its first collection last August.