- Both profit and sales fell at Gap during the last financial year
- The fourth quarter was also negative, with sales falling at all brands
- Old Navy was the only brand to show positive growth last year
Fashion retailer Gap has posted declines in both its profits and sales for its full year, after being plagued by below-par product.
Gap’s net income plummeted 33% to $214m (£154m) over the fourth quarter and fell 27% to $920m (£663.32m) during the year to January 30.
Chief executive Art Peck labelled the year one of “transition”, insisting that the brand had the “right strategies to fuel long-term growth”.
Peck told investors that Gap had experienced trouble on basics such as fit, according to Business Insider. For example, Banana Republic was stocking blazers, the sleeves of which the average woman could not fit her arm through.
Global like-for-likes fell 7% during the fourth quarter, after rising 2% during the fourth quarter of 2014. Over the year, like-for-likes dropped 4%, compared to a flat performance the previous year.
Gap stores’ like-for-likes were down 6%, compared to 5% the previous year.
Banana Republic like-for-likes declined 10% versus a flat performance the previous year, while like-for-likes at Old Navy, were flat, compared to growth of 5% the previous year.
Old Navy was the only Gap brand to grow revenue in the year, as global sales edged up from $6.62bn (£4.78bn) to $6.7bn (£4.83bn), representing its fourth consecutive year of growth.
However Christmas sales also fell at Old Navy by 7% to $1.83bn (£1.32bn).
Total revenue across the group dropped 3.9% to $15.8bn (£11.4bn) over the full year and 6.8% over the fourth quarter.
In Europe, which comprises 5% of Gap’s total sales, revenue dropped 13% over the full year to $797m (£575m). Over the fourth quarter, turnover fell 8% to $221m (£159m).
Peck said: “With a year of transition behind us, I’m confident that we have the right strategies in place to fuel our long-term growth. We made significant progress in 2015 transforming our product operating model, enabling us to be more responsive to trends and market conditions, and consistently deliver on-brand product collections.”