Fashion giant Gap has reported a slide in sales for December as the credit crunch in the UK and the US continues to bite.

Total sales and like-for-like sales were both down 6 per cent for the five weeks to January 5. Sales during the festive period were US$2.2 billion compared with US$2.34 billion (£1.12 billion versus£1.2 billion) for the comparable period last year.

Like-for-like sales for all its divisions were down during the period. At its international division, which includes the UK, they slid 1 per cent, although this was compared with an 8 per cent drop the previous year.

Gap North America like-for-likes dropped 9 per cent compared with a 9 per cent decrease the previous year and Banana Republic was down 1 per cent against a 2 per cent rise last year. At Old Navy they slumped 8 per cent compared with a 10 per cent drop.

Gap executive vice-president of finance and acting chief financial officer Sabrina Simmons said: “We were pleased that merchandise margins in December were significantly above last year, which is consistent with our strategy of delivering earnings with healthy margins. However, we did not sell through as much inventory as we anticipated and we’ll focus on clearing remaining holiday product in January.”

Sales were US$14.8 billion (£7.56 billion) in the 48 weeks to January 5 – an increase of 1 per cent on the previous year. Like-for-likes were down 5 per cent compared with a 7 per cent fall the year before.

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