The Gap 2Q14 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Trying to get more contemporary fashion at Banana Republic

” Last week at Banana Republic we launched a new marketing campaign called The New Look. It’s the beginning of enhancements in product and marketing, digital content from now right till the end of the year and beyond, and I think it was a nice start for the team. I think they really made a change in terms of this path that Banana Republic has been on from too conservative to more of a contemporary product appeal. I’m speaking mostly here about women’s product. I think our men’s business has been strong”

Today is the 45th anniversary of Gap Inc.

“Today is the 45th anniversary of Gap Inc. And this was the day in 1969 that Doris and Don Fisher both spent $21,000 each of their own money to start this incredible company. What I’d like to say is on behalf of the 140,000 employees and the millions of people who have worked in this company, a big, big thank you to the Fishers, this incredible couple who founded this business, who make us proud every single day. And I think that it’s a testimony to the strength of our brands, of our people, of our creativity, of our commitment to the customer, that this business has been around for 45 years, and continues to move forward and to blaze trails and be a formidable force in the apparel business.”

Consumer is feeling better

“I think the consumers feeling slightly better, which now we think it’s good for the overall industry.”

3200 stores

“Year-to-date we opened 36 company-operated stores on a net basis and ended the quarter with 3,200 stores.”

A strong relationship between outlet and core business

“I think that it’s a business that when the core brands are strong, they do very well. I mean, there’s just this incredible relationship between the specialty business and our outlet business. And our outlet business did very well in 2012 and 2013 because our core business was stronger at that time. So, if certain malls around the country, mostly B malls, maybe the odd C malls start to act promotionally like an outlet mall that’s 10 miles away, it’s more difficult to drive traffic to the outlet mall.”

About 500 stores come up for lease renewal each year

“I think the best math to apply is we have 2,500 odd stores in the U.S., so about 500 leases come up every single year. So that phenomenon plus the recession is what allowed us to do the work we did in the last four or five years.”