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The Gap Inc. (NYSE:GPS) Reported Decline Of Same-Stores Sales By 3%

Boston, MA 10/14/2013 (wallstreetpr) – The biggest U.S. specialty- apparel dealer, The Gap Inc. (NYSE:GPS)) announced that same-store sales declined by 3%. This value had been estimated to be on the profit side by 1.8% according to most of the analysts. In the estimate for the September same-store sales, what perhaps the analysts missed out was the insufficiency of new products and a major factor which led customers to refrain from indulging- the messy economic conditions. Other U.S. retailers who reported similar issues include L Brands too.

The retailers market a lower sale than they had expected. The reasons behind this declining urge in shopping of the Americans are seen by retailers as a result of the Government shutdown which was witnessed on Oct 1 this year. This had been the first such event in the U.S. Levied with higher taxes and insecurity relating to the implementation of the Affordable Care Act, the people are forced to shy away from spending.

Another possible reason for the retailers’ disappointment was the warmer than usual month of September. It can be so that the customers have not really been on the lookout for warm clothes including jeans and sweaters on account of the warmer and even wetter September.

Analyzing the situation, and considering all the possibilities of a lower than expected sales, a New-York based analyst concluded that the ongoing promotions which feature a lack of newness results in lesser foot fall in even otherwise busy malls. And this together with an unfavorable weather is sure to be a disappointment for retailers who are all geared up to sell their seasonable products. To combat this, some retailers even offered discounts as huge as 40% starting from as high as 25%.

Despite all the efforts by same-store retailers, the results were not very happy. While shares of the San-Francisco based Gap fell by almost 6.7%, those of L Brands fell by 0.5%.

Published by Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at recently due to my passion for the markets.

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