US-based fashion retailer Gap has today reported an eight per cent fall in group sales, with the later date of Easter and aftermath from the Japanese Tsunami impacting on trading.
Net sales for the five-week period ending April 2nd 2011 totalled $1.33 billion (£816 million), down from $1.45 billion for the same period last year.
Comparable sales for March, including online trading, fell ten per cent year-on-year whereas last year sales grew 11 per cent during the month.
Glenn Murphy, Chairman and CEO of Gap, said: “Our overall March performance was impacted by the tragic events in Japan, as well as the Easter shift into late April.”
“Our company has operated in Japan for more than 15 years, with over 150 stores today, so the devastating earthquake touched all of us at Gap Inc.”
International trading, including UK operations, fell nine per cent during March compared to a five per cent increase last year.
In February 2011 international trading fell seven per cent and like-for-like group sales were down three per cent, highlighting a long decline in trading at the retailer.
Gap also announced today that it has entered into a new $500 million revolving credit facility with a syndicate of banks, and as part of the same financing agreement it has also entered into a $400 million five-year term loan.
As part of the announcement the company was keen to state that it has generated an average of over $1 billion of free cash flow per year over the past five years and ended 2010 with $1.7 billion of cash and short-term investment on its balance sheet.
Sabrina Simmons, Chief Financial Officer at Gap, commented: “We believe this is an opportune time to optimise our capital structure by taking advantage of the favorable market conditions.
“Today’s announcement points to our financial strength and underscores our commitment to driving long-term shareholder value.”