STORE SPACES

Gap reduces GHG emissions 20% over five years

BY Marianne Wilson

Gap has reduced greenhouse-gas emissions by 20% from 2003 to 2008, exceeding the goal it set as a member of the U.S. Environmental Protection Agency’s Climate Leaders Program, according to the retailer’s fourth social responsibility report. The company reduced energy use on average from 34.32 kWh/sq. ft. (2003) to 27.48 kWh/sq. ft. (2008) at its U.S. stores.

Gap has focused on its energy use as part of a comprehensive approach to reducing its environmental impacts. Key environmental initiatives detailed in the report include:

• Replacement of the high-bay metal halide lighting fixtures at Gap distribution centers with energy-efficient fluorescents.

Since the program’s inception in 2006, Gap has significantly reduced its annual energy consumption and costs, saving 26 million kWh and more than $2 million annually, while maintaining and even improving lighting levels.

• Installation of a one-megawatt solar-power system with a ground-mounted solar tracking system at its West Coast distribution center in Fresno, Calif., in 2008. Gap expects the system to generate approximately 1.9 million kWh of electricity annually.

The solar installation was completed through a power purchase agreement in partnership with MMA Renewable Ventures, a subsidiary of Municipal Mortgage & Equity.

• By taking a close look at its practices, Gap was able to recycle more than 45 tons of paper, cardboard and containers from its North America corporate offices, distribution centers and stores.

• Joined the Business for Innovative Climate and Energy Policy coalition in partnership with such brands and companies as Nike, Levi Strauss, Starbucks, Timberland and Jones Lang LaSalle, along with Ceres — a national network of investors, environmental organizations and other groups focused on sustainability.

• Launched an environmental footprint assessment of its North American retail stores, seven distribution centers, 11 headquarters buildings and five design studios in 2008 examining energy, water usage, effluents and waste (including wastewater, solid waste and hazardous waste). It is scheduled to be completed this year. A second phase focusing on Gap’s supply chain will begin in early 2010.

According to the report, Gap store designers are conducting LEED (Leadership in Energy and Environmental Design) assessments of their current store designs to identify areas for improvement. Old Navy is currently developing a new store design template and aims to incorporate LEED design principles. 

“This is a priority for the company overall,” stated Franky Mo, senior manager of environmental affairs for Gap, in the report. “From the structure of stores to their air-conditioning, paint, lighting and energy use, we can design something much more efficient.”

The company issued the report in an online-only format, available at gapinc.com/socialresponsibility.

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Did sales heat up in July?

BY CSA STAFF

July sales results due out later this week from Target are likely to be somewhat anticlimactic. The company already told analysts last month that it would meet or exceed earnings estimates that were in place at the time, and second-quarter results for the period ended July 31 are scheduled for release in two weeks on August 18. Nevertheless, the July figures should provide valuable insight on a number of levels. For starters, there is the issue of the effectiveness of Target’s strategy to generate customer traffic through an ongoing, but recently heightened, promotional emphasis on food and consumables that is designed to allay shoppers concerns regarding Target’s prices.

Last month, Target’s same-store sales declined 6.2%, as fewer people shopped its stores and those who did spent less, so trends regarding customers traffic and average transaction size will be watched closely. Also instructive will be comments regarding the early pace of sales for the back-to-school season and expectations of seasonal sales during the remainder of August. Of course, the most closely watched metric will be same-store sales, which are expected to be negative, but a low-single-digit decline would be seen as a victory of sorts since earlier guidance and analysts’ expectations call for a mid-single-digit drop. Either way, the numbers will require some explaining on the part of executives because they will be compared to a prior-year period when consumers benefitted from economic stimulus checks, but at the same time were paying nearly $4 a gallon prices for gas. Then there is the issue of the credit card business and insight Target executives offer regarding repayment trends and whether consumers are paying their bills on time.

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Tapping former Target talent

BY CSA STAFF

Pier 1 Imports has secured the merchandising services of former Target executive Catherine David, who joined the Fort Worth-based retailer as EVP merchandising. David Spent 13 years at Target, and when she left the company was VP and general manager of Target Direct. However, she’s held several jobs in the interim, including most recently serving as president and COO for Kirkland’s and prior to that held VP and general manager positions with Sears Essentials, Sears Grand and The Great Indoors. She also serve as president of the Burnes Group, a photo frame and accessories supplier.

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