Banana Republic 2005 Annual Report Download - page 22

G A P I N C . F I N A N C I A L S 2 0 0 5
20 gap inc. 2005 annual report
A store is considered “Closed” if it is temporarily closed for three or more full consecutive days or is permanently closed. When a temporarily closed
store reopens, the store will be placed in the Comp/Non-comp status it was in prior to its closure. If a store was in “Closed” status for three or more
days in the prior year then the store will be in “Non-comp” status for the same days in the following year.
Our fiscal 2005 sales decreased $244 million, or 2 percent, compared to fiscal 2004. During fiscal 2005, our comparable store sales declined 5 percent
compared to the prior year primarily due to weak traffic trends as a result of our products which did not perform to our expectations. In fiscal 2006 we
continue to focus on improving our product in all brands, for each season. Our total noncomparable store sales increase was due to the 198 new store
openings. Our overall net square footage increased 3 percent over the prior year. Sales productivity in fiscal 2005 was $412 per average square foot
compared with $428 per average square foot in fiscal 2004. We closed 139 under-performing stores in fiscal 2005, mainly for Gap brand.
Our fiscal 2004 sales increased $413 million, or 3 percent, compared to fiscal 2003. Our first quarter performance was the strongest; however in the
second half of fiscal 2004, our comparable store sales declined contributing to the relatively flat growth over the prior year, primarily driven by missed
opportunities to better balance our holiday assortment with more traditional gift-giving products and challenges with the promotional environment
among competitors in the retail market. Gap International comparable store sales were negatively impacted by weak product acceptance in Europe
and Japan. Our total noncomparable store sales increase was due to the 130 new store openings, a majority of which occurred during the second
half of the year. Our overall net square footage remained relatively flat. Sales productivity in fiscal 2004 improved to $428 per average square foot
compared with $415 per average square foot in fiscal 2003. We closed 158 under-performing stores in fiscal 2004, mainly for Gap brand.
Comparable store sales percentage by brand for fiscal 2005 and 2004 were as follows:
• Gap North America reported negative 5 percent in 2005 versus positive 1 percent in 2004
• Old Navy North America reported negative 6 percent in 2005 versus flat in 2004
• Banana Republic North America reported negative 5 percent in 2005 versus positive 6 percent in 2004
• International reported negative 3 percent in 2005 versus negative 8 percent in 2004
Banana
52 Weeks Ended January 28, 2006 Gap (1) Old Navy Republic Other Total
Increase (decrease) ($ in millions)
2004 Net Sales $ 7,240 $ 6,747 $ 2,269 $ 11 $ 16,267
Comparable store sales (302) (361) (104) - (767)
Noncomparable store sales (87) 409 130 15 467
Direct (Online) (3) 32 - 3 32
Foreign exchange (2) (11) 29 6 - 24
2005 Net Sales $ 6,837 $ 6,856 $ 2,301 $ 29 $ 16,023
Banana
52 Weeks Ended January 29, 2005 Gap (1) Old Navy Republic Other Total
Increase (decrease) ($ in millions)
2003 Net Sales $ 7,305 $ 6,456 $ 2,090 $ 3 $ 15,854
Comparable store sales (76) 25 109 - 58
Noncomparable store sales (155) 195 51 7 98
Direct (Online) 16 47 14 - 77
Foreign exchange (2) 150 24 5 1 180
2004 Net Sales $ 7,240 $ 6,747 $ 2,269 $ 11 $ 16,267
(1) Includes Gap International.
(2) Foreign exchange is the translation impact of current year exchange rates versus current year sales at prior year exchange rates.