Covid-19: Gap reports eCommerce surge amid huge overall losses

Clothing retailer Gap has reported a surge in online sales amid an overall year-on-year fall of 43% during the first fiscal quarter ending 2 May 2020. The brand said the results were heavily impacted by the temporary closure of around 90% of its global stores from mid-March as a result of the Covid-19 crisis.

The company did substantially grow its eCommerce business in this period, at 13% year-on-year, to partially offset the losses from store closures. This has accelerated as the lockdown period continued, with online sales up by 40% in April, and by 100% in May.

There was significant variation in the eCommerce performance of the Gap brands in the three months up to 2 May. Online sales increased by 20% at Old Navy Global and by 49% at Athleta, while reductions of 5% at Gap Global and 2% at Banana Republic Global were recorded.

Unsurprisingly, store sales for the quarter fell by 61% across the whole group.

“Our teams' ability to pivot quickly and lean into our strong online business resulted in an encouraging 40% online sales growth in April. While net sales and stores sales continued to reflect material declines in May as a result of closures, we saw over 100% growth in online sales during the month,” said Sonia Syngal, president and CEO of Gap. “This online momentum, enabled by new omni-capabilities that have expanded the way customers can shop with us, leaves us well-positioned to fuel our brands going forward."

Although Gap stores have started to re-open in select states and countries since 9 May, there is likely to be an increased focus on eCommerce going forward to drive the brand’s recovery.

Katrina O’Connell, EVP and CFO Gap commented: “While we are pleased that store traffic and productivity is exceeding expectations, particularly at Old Navy and Athleta, we continue to plan conservatively as significant uncertainty remains ahead. We intend to lean into our best-in-class supply chain and advantaged omni-channel capabilities to respond as customer demand becomes clearer.”

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