Gap’s web sales grow 13.5% in Q4
February 26, 2015 04:43 PM
Online sales for Gap Inc. reached $2.50 billion in the apparel retailer’s latest fiscal year, which ended Jan. 31, a 10.6% over the prior 12-month period, Gap announced today. For the fourth quarter, online sales increased 13.5% to $792 million.
Web sales accounted for nearly 71% of Gap’s sales growth in the fourth quarter and just under 84% for the year.
Nonetheless, the fiscal 2014 results represented a slowdown in e-commerce growth for Gap, No. 19 in the Internet Retailer 2014 Top 500. Gap’s web sales grew at a compound annual growth rate of 21.5% from its 2009 through 2013 fiscal years, increasing to $2.26 billion from $1.12 billion.
Gap also fell short of U.S. e-retail growth, which was 15.4% for the 2014 calendar year and 14.6% for the last three months of 2014, according to the U.S. Commerce Department.
“Looking ahead at 2015, we will continue executing our global growth strategy, bringing new digital capabilities to life and making the shifts necessary to consistently deliver the brand-right, emotional product that our customers expect from all of our brands,” said in the earnings release. Peck, who previously headed up Gap’s digital and omnichannel businesses, took over as CEO on Feb. 1 from Glenn Murphy.
In speaking with analysts today, Peck emphasized the importance of Gap thinking “digital-first” in its marketing activities. For example, when shooting photos, the retailer should consider how they will look online, and not just in catalogs or on billboards. He also said that Gap e-commerce sites should communicate “aspirationally, holistically and emotionally in a way few people have expressed their brands digitally. We’re focused on doing that across our brands.”
In one of his first moves as he took the helm of Gap, Peck named Gap veteran Scott Key to oversee both marketing and e-commerce for the Gap brand, in a move aimed at revitalizing that struggling business unit. Peck emphasized in his comments today the need to revitalize the Gap brand, particularly its women's collection. Comparable-store sales at Gap locations were down 5% in the recently completed fiscal year.
In its earnings release, Gap noted that it had extended several programs during fiscal 2014 that tie together its websites for such brands as Gap, Banana Republic and Old Navy with its stores. That includes enabling store associates to place orders for customers from online inventory. The retailer also said services that let online consumers find and reserve items in a store, and to ship online orders from stores “are now widely available across the company’s U.S. store fleet.”
Gap operates 3,266 company-owned stores—2,736 of them in the North America, 330 in Asia and 200 in Europe. There also are 414 stores operating under franchise licenses, for a total of 3,680 stores carrying Gap brand names.
For the 2014 fiscal year ended Jan. 31, 2015, Gap reported:
- Web sales of $2.50 billion, an increase of 10.6% from $2.26 billion in the 2013 fiscal year.
- Net sales of $16.44 billion, up 2% from $16.15 billion during the prior fiscal year.
- Comparable-store sales were flat compared to fiscal 2013. Global comparable-store sales for Gap stores were down 5%, flat for Banana Republic and up 5% for Old Navy.
- Net income of $1.262 billion, down 1.4% from $1.280 billion.
For the 12-month period, the web accounted for 4.8% of sales, versus 4.3% a year earlier.
For the fourth quarter of Gap’s 2014 fiscal year, ended Jan. 31, 2015, Gap reported:
- Online sales of $792 million, a 13.5% increase from $698 million a year earlier.
- Net sales of $4.708 billion, up 2.9% from $4.575 billion.
- Comparable-store sales were up 2%.
- Net income of $319 million, a 3.9% increase from $307 million in the same quarter a year earlier.