Friday, August 10, 2001
Gap trims more jobs as sales figures drop
10 percent of staff head to layoff list
The Associated Press
SAN FRANCISCO Clothing retailer Gap Inc., which reported a dismal July sales performance, also announced Thursday that its job cuts were deeper than the original plan, first reported in June.
All told, the retailer, which is struggling with sluggish sales in all of its divisions, trimmed a total of 1,300 positions, or about 10 percent of its work force, through layoffs and attrition, exceeding the original goal of a 5 to 7 percent reduction. That move eliminated 800 employees.
In June, Gap announced plans to slash 500 to 700 jobs.
Gap is hoping the cuts will save up to $70 million for the year, with $30 million of that savings expected to come during the second half of 2001.
Cuts at Gap's Banana Republic stores are expected to contribute to the savings. In July, 300 store management positions were eliminated at Banana Republic, and 240 jobs at Banana Republic stores across the country were cut.
Excluding the staff reduction charges, we expect second-quarter earnings per share to be about 11 cents, said chief financial officer Heidi Kunz. Including these charges, we anticipate the second quarter earnings per share to be about 9 cents.
The retailer reported on Thursday a 12 percent drop in sales at stores open at least a year, known as same-store sales. Same-store sales are the best indicator of a retailer's health.
Shares were down nearly 6 percent, or $1.57 per share, closing at $25.60 on the New York Stock Exchange.
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