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Gap’s comp sales down again in August, fulfillment centre fire could impact on Holiday shipments

Gap’s struggle continues. August same-store sales fell 3% and its turnaround efforts hit another bump this week. A fire at one of its largest distribution centres is expected to hit online fulfill orders heading into the Holiday season. Its shares fell 1.2% in after-hour trading.

But back to August when its signature brand’s comps fell 5%, at least an improvement on the 8% dip a year ago. Banana Republic continues to be its biggest drag with comps down 10% after falling 11% a year ago.

Old Navy at least helped offset the overall weakness, posting a modest 1% sales increase, but way down on the 6% gain of a year ago.

Total sales fell 2% to $1.17bn from $1.2bn for the month.

“While we are pleased with the continued progress at Old Navy, we remain focused on improving results across our global brands,” said CFO Sabrina Simmons in a now familiar statement.

Meanwhile, Gap said it is currently assessing the impact from a major fire at its 1.3msq-ft Fishkill, New York, distribution centre which remained closed this week. The fire, which broke out Monday night, is under investigation by a variety of agencies.

“While it will take time to understand the full impact and cause of the fire, we have contingency plans in place and are working across our North American network of distributions centres to continue to serve our customers,” said spokeswoman Debbie Felix. Gap’s ship-from-stores capabilities will also help the situation, she added.


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