Gap Inc. reported weak sales across its brands with shares taking a dive on Tuesday.
Sales dropped 7.4% to $1.12 billion in April, versus $1.21 billion last year. Sales for the first quarter also declined to $3.44 billion compared to $3.66 billion one year ago. The company's shares plunged 13 percent. At Banana Republic, sales slid 11 percent, and at Old Navy sales fell 6 percent.
The company which faces tough competition from fast-fashion retailers such as Hennes & Mauritz AB and Zara owner Inditex SA, has also been shrinking its footprint, by closing dozens of locations in its home market.
Chief Executive Officer Art Peck, who took over last year, had told investors and analysts that the company would show signs of a turnaround by this season and put the Gap and Banana Republic brands back on track.
Citing a tepid macro environment for retail and store traffic problems Gap said it is working on 'identifying opportunities to streamline its operating model,' and that it was re-evaluating the store portfolio for its Banana Republic and Old Navy chains.
The company will provide more details when it reports first quarter results on May 19.
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