GAP INC. CHAIRMAN AND CEO OUTLINES BUSINESS PRIORITIES AT INVESTOR CONFERENCE
Company Announces Plans to Remodel 50 Old Navy Stores
NEW YORK – June 10, 2009 – Gap Inc. (NYSE: GPS) chairman and chief executive officer Glenn Murphy today updated investors about the company’s top priorities, including gaining market share at its core brands in North America while continuing to grow through its Online and International businesses.
“With our solid foundation and operational discipline in place, we’re now taking steps across our brands to gain back market share,” said Murphy. “Our healthy balance sheet also gives us the flexibility to make strategic investments for the future.”
Murphy presented at the Piper Jaffray 29th Annual Consumer Conference where he reiterated the company’s efforts to stabilize its North American business. The company has improved the efficiency of its economic model, and is now focused on leveraging creative talent throughout the company, and connecting with customers. As part of these efforts, Mr. Murphy announced Old Navy’s plans to remodel approximately 50 stores in 2009.
“We’re pleased with the results we’ve seen from the new store prototype that has been tested this year in two Old Navy stores in California, and we’ll invest in 50 additional remodels this year,” said Murphy. “Early results demonstrate the new layouts create a better experience for our customers that better captures the unique energy that’s central to Old Navy’s fun personality.”
The company reiterated its full year capital expenditure guidance of $350 million for fiscal year 2009.
Gap Inc.’s Online and International businesses continue to offer solid growth potential for the company – which, combined, have increased by approximately $500 million from 2006 to 2008.
Plans to expand the offerings of the company’s online shoe and handbag shop, Piperlime, include the addition of 50 new contemporary apparel labels later this summer.
Internationally, the company will continue to open new stores, including approximately 40 new franchise stores in a total of 20 countries by the end of the year. The company is also expanding its Outlet business in the United Kingdom, Japan and Canada.
Investor Meeting Details
A live webcast of the presentation will be accessible through www.gapinc.com under the Conference Calls & Webcasts page in the Financials section under the Investors tab beginning at 10:30 am ET on June 10, 2009. An archive of the presentation will be available for 30 days through www.gapinc.com.
Forward Looking Statements
This press release and related webcast contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding: (i) gaining back market share; (ii) making strategic investments; (iii) stabilizing North American business; (iv) Old Navy remodel plans; (v) capital expenditures in fiscal year 2009; and (vi) growth opportunities, including international, Outlet and online.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following: the risk that the adoption of new accounting pronouncements will impact future results; the risk that the company will be unsuccessful in gauging fashion trends and changing consumer preferences; the risk that changes in general economic conditions, consumer confidence, or consumer spending patterns will have a negative impact on the company's financial performance or strategies; the highly competitive nature of the company’s business in the United States and internationally and its dependence on consumer spending patterns, which are influenced by numerous other factors; the risk that the company will be unsuccessful in identifying and negotiating new store locations and renewing leases for existing store locations effectively; the risk that comparable store sales and margins will experience fluctuations; the risk that the company will be unsuccessful in implementing its strategic, operating and people initiatives; the risk that adverse changes in the company’s credit ratings may have a negative impact on its financing costs, structure and access to capital in future periods; the risk that changes to the company’s IT systems may disrupt its operations; the risk that trade matters, events causing disruptions in product shipments from China and other foreign countries, or an inability to secure sufficient manufacturing capacity may disrupt the company’s supply chain or operations; the risk that the company’s efforts to expand internationally through franchising and similar arrangements may not be successful and could impair the value of its brands; the risk that acts or omissions by the company’s third party vendors, including a failure to comply with the company’s code of vendor conduct, could have a negative impact on the company’s reputation or operations; the risk that the company does not repurchase some or all of the shares it anticipates purchasing pursuant to its repurchase program; and the risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; any of which could impact net sales, costs and expenses, and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009. Readers should also consult the company's quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009.
These forward-looking statements are based on information as of June 10, 2009. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
About Gap Inc.
Gap Inc. is a leading global specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Piperlime and Athleta brand names. Fiscal 2008 sales were $14.5 billion. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Japan and Ireland. In addition, Gap Inc. is expanding its international presence with franchise agreements in Asia, Europe, Latin America and the Middle East. For more information, please visit www.gapinc.com.