Banana Republic Continues to Disappear

By Douglas A. McIntyre Updated Jan 12, 4:05PM EST · Published Jan 7, 9:15AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Banana Republic Continues to Disappear — © Thinkstock

[cnxvideo id=”655415″ placement=”ros”]Gap Inc. (NYSE: GPS) posted good news about its holiday sales, in contrast to nearly every other large brick-and-mortar retailer. However, among its three major divisions — Gap, Banana Republic and Old Navy — Banana Republic same-store sales fell 7% in December, on top of 9% in December 2015. The flailing Gap division was founded in 1978 and is considered Gap’s effort into a more upscale market than its flagship brand is.

Gap’s most recent numbers:

December Sales Results

Gap Inc.’s net sales for the five-week period ended December 31, 2016 increased 3 percent to $2.07 billion, compared with net sales of $2.01 billion for the five-week period ended January 2, 2016.

The company’s comparable sales for December 2016 were up 4 percent versus a 5 percent decrease last year. Comparable sales by global brand for December 2016 were as follows:

Gap Global: positive 1 percent versus negative 2 percent last year
Banana Republic Global: negative 7 percent versus negative 9 percent last year
Old Navy Global: positive 12 percent versus negative 7 percent last year

The overall strength of numbers came as a surprise because, in November, Gap indicated its holiday season would be troubled. It increased the number of stores it expected to close in 2016 to 65 from 50.

[nativounit]

Gap’s brand management problem looks something like that of Sears Holdings Corp. (NASDAQ: SHLD), which operates the Sears and Kmart chains, and several other brands that do not have their own stores. Among these, Craftsman was just sold for $900 million to Stanley, Black & Decker. Gap must be in the process of making decisions about which brands to support and which to starve.

Like a number of other retail brands, Banana Republic’s days soon may count down to zero. It sells an extremely wide selection of clothes, shoes, bags, hats, sunglasses and accessories. Maybe that is its problem: being too many things to too many people, in a retail environment in which the competition for each of these things is so impossibly fierce.

[wallst_email_signup]

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.