Banana Republic is floundering.
The clothing chain’s same-store sales plunged 11% in the first quarter, marking its fifth straight quarterly decline, according to preliminary results reported by parent company Gap Inc. on Monday afternoon.
Gap executives will likely go into more detail on why sales fell when the company reports earnings on May 19, but it’s likely that the poor performance will be chalked up to a warm winter.
When Business Insider visited a Banana Republic store in February following dire fourth-quarter results, we found heavy promotions — in particular on its winter styles.
The problem, though, wasn’t just that classic items like sweaters had to be marked down. Some of the styles also just missed the mark and looked like they belonged in a Forever 21, and aimed at teenagers rather than the professional women that Banana Republic targets.
Fortunately for the company, things started to pick up in April, just as spring styles were likely hitting stores. Same-store sales dropped 7% in the month of April, versus a 15% decline the previous year.
Banana Republic says it is returning to its roots — which Gap CEO Art Peck called “updated classics with a twist” last fall — but consumers haven’t responded yet.
Gap has long pegged Spring 2016 as its turnaround point — at least, for its namesake brand. Fortunately, things are somewhat improving for Gap.
Gap’s sales were down 3% in the first quarter, versus 10% this time last year. A recent walk through a Gap store in New York City showed the company was returning to its roots: simple, colourful basics.
The company says it is looking for ways to improve its business. According to a release, it is “identifying opportunities to streamline its operating model to be more efficient and flexible, while more fully exploiting its scale advantage.”
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