Clothing giant Gap experienced a better than feared 0.4% drop in second-quarter profits. Sales were down across all of the retailer’s divisions, contributing to a 7.3% decline in group net sales to $3.24bn (£2bn). Group like-for-like sales dropped 8%.
The higher-end Banana Republic brand’s like-for-like sales fell 15%, while Gap and Old Navy were hit by 10% and 4% falls respectively. International sales dropped 5%.
The retailer is being hit by the difficult economic conditions as well as more fashionable, and cheaper, rivals. Gap chief executive Glenn Murphy said the retailer needs to make “selective” additional marketing investments in order to reinvigorate the brand.