Struggling apparel retailer Gap Inc. will now align its Gap brand efforts to target consumers in their late 20s and early 30s, distinguishing itself from teen and college age focused stores, such as Abercrombie and Fitch, the companyâ€™s chief executive said in a conference call with analysts Thursday.
The firm, which reported 26 percent drop in net profit for its fiscal first quarter yesterday, is attempting correct its course after seven quarters of declining profit.
We took important steps in the first quarter by strengthening leadership teams and refining strategies at Gap and Old Navy, interim Gap Chief Executive Bob Fisher said in a statement. While we are making progress, there is more work to be done.
Gap had been targeting 18 to 34 year-olds, but will now narrow its focus to the 24 to 34 year-old demographic, Fisher said.
The firm is currently searching for a new CEO and on Wednesday, named designer Patrick Robinson as its head designer for adult merchandise and lingerie. Robinson has previously worked for Perry Ellis and Anne Klein.
In January, the company ousted its previous chief executive Paul Pressler after a dire performance during the critical holiday shopping season.
For its latest quarter, the clothier said it was hurt by steep markdowns and a write-down related to the closing of certain stores.
The operator of Banana Republic, Old Navy and Gap stores, said net income fell to $178 million, or 22 cents a share, from $242 million, or 28 cents a share, in the year-ago period.
Excluding losses associated with closing of its Forth & Towne stores, which targets women over 25, the firm earned 25 cents per share. Revenue rose 3 percent to $3.56 billion.
Analysts, on average, expected Gap to earn 24 cents a share on revenue of $3.48 billion, according to Thomson Financial.
Same-store sales - an important retail metric which tracks stores open for over a year - fell 4 percent in the quarter compared to a 9 percent decline a year earlier.
Shares of Gap rose 11 cents, or 0.6 percent, to reach $18.40 in Friday afternoon trading on the New York Stock Exchange.