Profits take a 53 per cent tumble
International clothing retailer Gap has posted a 53 per cent drop in quarterly profits, on the back of falling sales, marketing costs and price cuts.

Net profit for the second quarter to July 29 was US$128 million (£70 million), against US$272 million (£144.4 million) for the same period last year.

Total sales were flat, at US$3.7 billion (£1.96 billion) over the three months. Like-for-likes fell by 5 per cent.

Sales at the group's international division fell the hardest, with like-for-likes down 11 per cent.

Gap has cut its profit target for the full year and said that current trading is poor.

Gap president Paul Pressler said: 'The second quarter continued to be challenging, as we aggressively cleared inventory to prepare for autumn merchandise. We also invested in marketing and stores to improve second-half performance.'

Pressler added that each brand was at a different stage in its turnaround. Banana Republic and online sales were encouraging, but it would take 'several seasons of consistent product, marketing and store improvements' to win back customers to the Gap and Old Navy chains.

Gap operates 3,070 stores worldwide under the Gap, Old Navy and Banana Republic fascias.

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