Will Gap’s 40th Change Its Luck?

[Editor’s Note: Ian Ritter is taking a much-deserved vacation over the next week, and GlobeSt.com retail reporter Debra Hazel is filling in for him on Counter Culture. Please be nice.]

Mention 1969 to any New York Mets fan, and we all get a little dreamy with visions of Seaver, Koosman, Ryan and the late great Gil Hodges (yes, man walked on the moon and there was some concert upstate, but we have our priorities straight). But that year also saw the birth of The Gap, so the company is celebrating its 40th anniversary with a concert to be simulcast in more than 700 stores this evening, contests and a casual day (in 1969 Premium jeans) at the New York Stock Exchange tomorrow.

All the hoopla, however, can’t erase the fact that like the Mets, recent years haven’t been kind to The Gap. Final second quarter sales and earnings will be released later today, but total company July comp sales were down 8%. On Aug. 6, the company said its second quarter comps also decreased 8%.

Still, the chain anticipated posting a profit of 32 cents per share, and the sales decreases are an improvement over last year’s results, when July same-store sales dropped 11% and declined 10% for the quarter.

Though we’re a far cry from the era when Gap pretty much dressed the country, the chain says merchandise margins are healthier. Is the Gap slowly coming back? What will keep it from being another exhibit at some retail equivalent of Old-Timer’s Day?

6 Responses to “Will Gap’s 40th Change Its Luck?”

  1. 1 Ladislao August 21, 2009 at 11:34 am

    Although losing many stores will be inevitable, I think it will make come back if it brings reintroduces it’s original THICK cotton khaki pants. Wasn’t what that company was known for in the beginning? Now their pants are thin and flimsy and cost more. I still have 3 of there khaki pants from 10 years ago and they STILL look great. Now THAT was quality. Oh well, like most things in life hopefully they won’t become too big for the customer and forget the reason why they got into business in the first place… for the customer. Usually by that time businesses like that go under. I haven’t bought from them in years, and I used to be a very loyal customer… for years. Watch what happens, people are going to get back to quality. Your Dunkin Donuts, GAP – type stores are going to be in trouble, because it’s going to be about the local store owner you know by name and actually have a relationship with in your neighborhood making the BEST muffin and coffee at a great price. Your local taylor making the best suit (again) at a great price. That’s what this country needs. Besides being a country that has something to give to other countries to be at a PRODUCTIVE CAPACITY, like we used to be, before we got greedy and exported and outsourced everything. Something that will recreate this country like the invention of the wheel or fire. If we don’t get back to the basics and also abolish the Federal Reserve (a privately held business) that creates “fiat” currency based on interest (that the rest of the world has imitated as well), we’re going to have a rough 40-50 years of this “recession” (actually depression).

    BTW, just to let you know the new BLS U-6 Unemployment report (or “Effective Unemployment” rate coming from the Bureau of Labor Statistics) has come back with 18.35% (REAL) unemployment for the month of July ’09. Not a pretty situation. I keep saying it, you wait until the beginning of next year when the early first quarter reports come in mid-February from your retail businesses. You’re going to see a LOT more BK’s, and I’m not talking about burger joints either. This is just the beginning. I hope retail stores like The GAP see this and make proper adjustments to their existing business model and get back to consolidating and making quality clothes so they can ride this tidal wave of this fiscal mess that’s coming. Again, I hope from all the reading and listening to people like Gerald Celente, Peter Schiff, Marc Faber and Harry S. Dent, Jr and others like them I can only HOPE they are wrong. I just don’t see it though. That’s because they all follow the trends (history) and not politics. We’ll wait and see what happens. Later, Ian (and again, thanks for posting articles like this)…

  2. 2 smiley1 August 24, 2009 at 8:24 am

    Ladislao, Heavy stuff here. while I think you’re right about GAP AND the economy, I hope you’re wrong about the economy…overall, well put.

  3. 3 John G August 24, 2009 at 4:08 pm

    Debra, good topic. GAP needs to pull back and downsize some stores at the same time that they find a fashion pulse. I don’t see us going back to too many local apparel, food operators because after all, we are Americans. “Greed is Good” said Gordon. Maybe not as much as we have had but it is still what makes this country grow. If we don’t see some focus on it and a way to get growing again the doomsday predictions will come true. Best of luck to GAP, us Landlords will likely be more gracious to you in your recession than you were to us on your rise.

  4. 4 Ladislao August 25, 2009 at 12:56 pm

    Thank you “smiley1” I appreciate what you wrote and again, I too hope that I am completely wrong on what I’ve been following. I really do. Riots, kidnappings, tent cities, ghost malls, food lines are not what I want for our family either. But with all this ensuing debt that WILL mature by the middle to the end of 2010. (i.e.; the “Alt A”, “Option Arm” & “Commercial Real Estate” Loans, Credit Card Debt and the “Printing Money Out of Thin Air” – based on interest debt), it’s VERY HARD not to see this calamity NOT happen.

    But I do need to reply to “John G.” Although you mentioned that we do need to downsize some stores (as I too mentioned), this “Greed is Good” kind of thinking is PRIDEFUL (and I don’t mean the good kind of pride; I’m talking about the ARROGANT type) IS what’s damaged our way of life. I know that you did mention “Maybe not as much as we have…” but I think we need to ACT and get AGGRESSIVE (and NOT get greedy) on getting back to the basics. The backbone of our country WAS and IS small local businesses – YES, your local taylor, doughnut/coffee, diner, etc. shops WERE what served your local communities NOT your Walmarts. That kind of “Greed is Good” thinking got those MASS-MARKET stores in here to begin with and now we have Asian sweat shop employees as a result it. Again, because we got “greedy” and those Walmart-type “big-wig” investors found out how ungrateful WE were as employees because we wanted more per hour in our salaries and those investors found overseas workers who would work on the “cheap.” And why did this happen? Because our lovely government feels the need to continue over-taxing us and taking 50%+ of our paychecks leaving us NO CHOICE but to complain about higher pay. Which again, in turn forces the investor (“greedy” or not) to lean on overseas cheap labor. We have to go back to the source of why this has happened to us; the GREED of our Government and Corporate Elite. Now I know that I’m speaking in general terms, but this is gist of what’s happened (over many years) to most of us “everyday” people. We as whole (I believe) have become complacent and ungrateful; which is the “arrogance” that I’m talking about.

    Look at what happened to companies like GM. You have an assembly line employee that is getting paid $100K+ a year. Now times that by THOUSANDS of employees and they’re STILL complaining that they’re NOT getting paid enough. Why? TAXATION !!! Why? GREED !!! From who? Hmmmmm… It doesn’t take a rocket scientist to figure that one out. Again, our government and corp. elite. These are the ones that are controlling (or at least think that they are controlling) because we’ve allowed them to control these companies.

    By and large most of us have become “greedy” in some form or another, and that kind of thinking is created (and imitated) from the TOP (those that run our country) on DOWN (the everyday worker). Again, we need to get back to the basics of what made this country what it is. Focusing on the small local business owner. But that is only part (and I do emphasize PART) of our recovery. The other part is producing something that we can EXPORT to other counties that have a REAL NEED for whatever product we can create that will benefit those countries we sell our product to (i.e.; Cold Fusion products or another type of revolutionary product) that will get most of us back on top at a productive capacity AND benefit the and service those other countries. This is far greater than just the GAP. It’s too bad we have greedy (puppet controlled) politicians who are ruled by our “elite” government. That as a whole has affected places like the GAP and Landlord owner (like yourself). This is just what I see, and it’s just my opinion. The one thing that I am very grateful for are the few who are reading this information here on GlobeSt.com and hopefully making whatever adjustments they need to protect themselves and somehow give back to others so we can (once again) grow the great nation we once were and better.

    Please forgive me for my passion; I’m just sick and tired of seeing what I’m witnessing and feel the need to share what’s happening. Again, it’s just my opinion. Unfortunately it’s only until we’re physically hungry with no roof over our heads, that’s when people as a whole do something about it to stop this greed from continuing – it’s called a revolution and I hope it NEVER happens.

  5. 5 John G August 26, 2009 at 9:53 am

    Wow, I hope you can find some sunshine in your day.
    Greed is Good in my case refers to having people NOT hiding in their homes afraid to buy anything since the media has convinced them not to(turning around now a bit….). Greed was and is in all those mom and pops that go out to make a better life for themselves.
    Big Business is here to stay. You mention the GM example and I certainly agree. That $100K line worker came about because of unions and that development is contrary to your “greed” theory. That is a share the wealth idea.
    You are right, government is and has been out of control going all the way back to the founding fathers according to a large part of the country.
    Back to Gap, best of luck in the effort and lets hope an improving economy makes them more successful again.

  6. 6 Ladislao August 26, 2009 at 10:23 am

    To John G.:

    Thank you for the thoughts. Although I’ve learned that it doesn’t matter typically what others may feel about what I say, I do appreciate you not going off on me and thinking that what I replied to was not off base. I may have misunderstood that “Greed is Good” theory. I thought that actually being “greedy” WAS good – literally. But I now understand the context and will look at that theory more when I have time.

    BTW, I am a very happy husband with kids, but at the same time I’m not going to fool myself into believing that everything will be okay. It goes into that whole thinking that if you just saw the doctor and found out that you have some kind of major disease, would you prefer that doctor to NOT tell you the truth and lie to you (even though their may be a cure) and let the condition worsen? I know I wouldn’t want that. It might be very hard at first to hear it and even go into denial (like we all have about “Federal Reserve “Note” backed by nothing” issue) but once we face it then we can correct the issues. But if we ignore it, then becomes what it is right now, and that is what has damaged most (if not all) of us as a nation (and globally). Thanks again John for your reply and I do hope The GAP will recover (and also bring back their thick cotton Original Khaki Pants !!!). LOL… :-)…

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