The numbers include the previously announced closure of the 19-store Forth & Towne chain, as well as the conversion of 45 Old Navy Outlet units to Old Navy stores. Forth & Towne will be shuttered by June, with the Old Navy conversions to be complete by October. During fiscal year 2006, the company opened 194 store locations and closed 116 store locations, 79 of which were Gap brand stores.
In addition, the company will remodel 75 to 100 Gap locations, up from 25 rehabs in 2006. Plans also call for remodeling about the same number of Old Navy units. "We are behind the curve in refreshing Old Navy and Gap. This will play an important role," in the turnaround, Pollitt said.
The moves cap a tumultuous few weeks at the company which saw the departure of CEO Paul Pressler in late January and, more recently, the naming of Marka Hansen, former president of Banana Republic, as president of Gap Brand and Michael Cape as the new executive vice president of marketing for Old Navy.
"We have a lot of hard work ahead, but I believe this company still has tremendous potential," said Robert J. Fisher, interim president and chief executive officer of Gap Inc., following Pressler's departure. The company is in the final stages of selecting a search firm to find a replacement for Pressler, he said.
Net sales for the fourth quarter rose 2% to $4.9 billion. Comparable-store sales decreased 7%, compared with a decrease of 6% for the fourth quarter of the prior year. Net earnings for quarter were $219 million, compared with $337 million the previous year.
Net sales for the 53-week fiscal year were $15.9 billion, compared with sales of $16 billion for the 52-week prior year. Comparable-store sales decreased 7%, compared with a decrease of 5% in 2005.
At year-end, Gap operated 3,053 stores under the Gap, Old Navy, Banana Republic and Forth & Towne banners in North America, Asia and Europe.
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