FINANCE

Gap Q1 income drops 22%; Athleta on track for 100 stores by year-end

BY Marianne Wilson

San Francisco — Gap Inc. on Thursday said its first-quarter profit dropped 22%, hurt by weakening foreign currencies.

The retailer earned $260 million in the three-month period ended May 3, down from $333 million in the year-ago period. Revenue increased 1.2% to $3.77 billion. Same-store sales were down 1%.

"After a disappointing start, I’m pleased with how the business performed toward the end of the quarter, especially at Old Navy,” said Glenn Murphy, chairman and CEO of Gap Inc. "We are confident in our strategies to drive long-term value, as evidenced by the reaffirmation of our full-year guidance."

Gap noted its ongoing expansion of its Athleta brand. With six new store openings during the first quarter of fiscal year 2014, Athleta is now on track to end the year with about 100 U.S. stores.

In fiscal year 2014, the company expects to open about 185 company-operated stores, focused on China, Old Navy in Japan, Athleta and global outlet stores. It expects to close about 70 company-operated stores.

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FINANCE

Zumiez to open 55 stores in fiscal 2014

BY Marianne Wilson

Lynnwood, Wash. — Teen active-sports retailer Zumiez reported net income in the first quarter of fiscal 2014 of $2.5 million, flat with the year-ago period. The retailer intends to open approximately 55 stores in fiscal 2014, including up to seven locations in Canada and five in Europe.

Total net sales for the first quarter ended May 3, 2014, increased 9.7% to $162.9 million from $148.5 million last year. Same-store sales increased 1.8%.

“Our merchandise and selling strategies helped deliver better than expected first quarter results, including positive comps, and continue to distinguish Zumiez as the leading global action sports lifestyle retailer. Rick Brooks, CEO of Zumiez Inc. “The investments we’ve made in our people and systems including expanding our digital capabilities are allowing us to better meet the needs of our North American and European customers and supporting full price selling in a challenging retail environment.”

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MARKETING/SOCIAL MEDIA

Survey: Consumers prefer online, email-based customer service

BY Dan Berthiaume

Sunnyvale, Calif. – Modern shoppers have a very low tolerance for poor customer service, and crave a more intimate relationship where retailers know their needs, wants and preferences, and respect their time and business. According to an April 2014 research survey from customer engagement technology vendor Kana Software Inc., when asked about their preferred customer service communication channels used to engage with retailers in the past six months, the channel named most often as most preferred was Web (24.5%), followed by email (17.9%).

Channels cited most often as least preferred were video chat (named by 30.2% of respondents); phone was the next least preferred channel, named by 22.6% of respondents.

When asked to compare customer service during online versus in-store/brick-and-mortar shopping, 40.5% of respondents said that online was better, whereas 33% thought both were about the same. Nearly 18% said in-store customer service was better, and 8.5% had no opinion on the matter.

More than one-third of those surveyed reported experiencing a customer service issue related to different business policies and procedures for online versus in store/brick-and-mortar shopping – for example, issues with purchasing online and returning in store, indicating retailers have more work to do in creating omnichannel customer service strategies to ensure consistency in omnichannel retailing.

“It’s no surprise that organizations are leveraging Web self-service and email more and more as our survey shows consumers prefer these channels," said Scott Hays, senior director, product marketing for Kana. "We not only see Web and email infused with strong knowledge management, we have also observed that Web self-service addresses a new way that consumers are engaging with brands – in a ‘multimodal fashion.’ Customers often use multiple channels at once – e.g., speaking to an agent while browsing the company’s website and expecting near-immediate confirmations by email. The challenge now for organizations is to weave those experiences together in real time to provide optimal engagement with the customer.”

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