Specialty retailer Gap Inc. (NYSE:GPS) reported solid August 2012 sales with increases of 9% in both its net sales and comparable store sales compared to the same period last year.  Talking in terms of brands, Old Navy was the major contributor to Gap’s growth in August with a comp increase of 12% against a 4% decline last year. We believe the August results confirm the strong positioning of Gap in the current teen apparel market. Gap competes with other specialty retailers like Aeropostale (NYSE:ARO), American Eagle (NYSE:AEO), Abercrombie & Fitch (NYSE:ANF) and Urban Outfitters (NYSE:URBN).
August results confirm Gap’s strong positioning in teen apparel market
With solid net sales and comparable sales growths in August, Gap has ended its back-to-school season in style. Clubbing together the results in July and August, considered the two core months for back-to-school shopping, Gap has significantly outperformed peers such as Aeropostale and Abercrombie & Fitch in the teen apparel space.
Old Navy major resurgent brand this back-to-school season. With comp growths of 12% in both July and August this year, the brand was the highest contributor to Gap’s back-to-school sales in 2012. We believe the impressive results in the season reflects Gap’s focus on improving its product mix and a tight control on its inventories. By hiring Jill Stanton as Creative Adviser, Old Navy certainly has improved Gap’s product offerings and has catered well to the consumer expectations. And with a tight control on inventory, the company has ensured that its merchandise remains up to date with the current fashion trends.
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