November 21, 2008, 12:00 AM

Gap fills the financial gap with higher web sales

In the third quarter the web was the chain retailer’s only growth channel. Web sales rose year over year by 15%, compared with a drop of 7.5% and 12%, respectively, for total revenue and same store sales.

 

It’s the same financial scenario at Gap Inc. with e-commerce generating the only growth in quarterly sales.

For the quarter ended Nov. 1, web sales rose by 15% to $284 million from $247 million in Q3 of 2007. At the same time total revenue dropped by 7.5% and comparable store sales declined by 12%.

Overall Gap, No. 24 in the Internet Retailer Top 500 Guide posted net earnings of $246 million on sales of $3.56 billion vs. net earnings of $238 million on sales of $3.85 billion in the third quarter of 3007. The web accounted for 8% of sales in Q3. "During the third quarter, we made progress in driving earnings growth by managing our inventory and reducing expenses," says CEO Glenn Murphy. "Our brands are focused on the upcoming holiday season and providing customers with a compelling store experience."

For the first three quarters of the year web sales for Gap are up by 15.8% to $711 million from $614 million in the prior year. Gap posted net earnings during the first three quarters of $724 million on sales of $10.44 billion, compared with net earnings of $568 million on sales of $11.08 billion in the same period in the prior year.

Gap made an acquisition in the third quarter in order to grow its direct marketing business. In September, Gap acquired women’s active apparel retailer Athleta Inc. for about $150 million in cash.

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