Gap Inc. posts profit in 2021
07/03/2022
Sales for Gap Inc.’s biggest brand, Old Navy, were negatively impacted by supply chain issues in the fourth quarter of 2021, but crossed the $9 billion cap in net sales for the full year. This is an increase of 14% compared to FY 2019.
Ongoing restructuring at its operations at Gap continue to impact sales, which reached $4 billion, down 12% in 2021 compared to FY 2019. The group closed 147 Gap stores in 2021, and 86 in Europe alone. This has cut its revenues in the region by 40% ($525 million in 2019 to $328 million in 2021). In 2021, Gap sales in North America fell just short of $3 billion (at $2.957 billion).
Banana Republic’s sales continue to contract, also due in part to store closures. Fiscal year 2021 net sales did not make the $2 billion mark ($1.976 billion) and slipped 18% compared to fiscal year 2019.
Across all brands, Gap Inc closed nearly 200 stores in 2021, and now has a global count of 2,835 locations. The group opened 44 new locations for Old Navy and 30 for Athleta in the period.
The group’s athleisure brand, Athleta is growing at a fast pace. Its sales for FY 2021, at $1.4 billion, represent a 48% hike over FY 2019. Gap Inc. said Athleta is on track to hit $2 billion in net sales by fiscal year 2023.
As for many retailers, online sales grew 57% across all brands, and now represent 39% of the group’s total revenues.
“After two years of restructuring, including divesting smaller non-strategic brands, transitioning our European market to an asset-light partnership model and shedding underperforming North American stores, our core business is strong and we are poised for balanced growth across our four billion-dollar lifestyle brands,” said Sonia Syngal, CEO, Gap Inc.
The company expects to see low single-digit growth in fiscal year 2022 while first quarter net sales are expected to remain difficult, decreasing in the mid to high-single digits versus the first quarter of 2021.
Image: Gap Inc.
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