Wall Street: Gap poised for improvement
New York City A Wall Street analyst said Monday that Gap results are improving and showing stability.
PiperJaffray analyst Jeffrey P. Klinefelter said Gap is poised to benefit as the clothing category recovers from the recession.
“After three years of apparel industry declines, our research points to a low single-digit gain during 2010 and for large-scale retailers like Gap to benefit at least at average rates,” he wrote.
The Gap has worked on cutting costs and improving its merchandise selection at its namesake, Old Navy and Banana Republic stores. The company reported March same-store sales rose 11%, on strong results across all of its brands.
TGT shares trump WMT
Investors bid up shares of Target last week following the release of better than expected monthly same store sales and 10 cent a share increase in first quarter earnings guidance. The stock advanced $1.63 to close last Thursday at $55.64 compared to the prior day’s close of $54.01 and at one point touched a new 52-week high of $56.44. As an added bonus, the surge moved shares of Target past Walmart for the first time this year. Walmart advanced 10 cents to close at $55.38.
The trend continued/the momentum shifted, etc… this week as share of Target on Monday advanced/declined, etc….(NEED TO ADD IN WHAT HAPPENED TODAY WITH TGT AND WMT AFTER THE CLOSE SO THIS IS UP TO DATE.)
More than a pretty face
The Food Network has churned out a lot of so-called celebrity chefs, but Giada De Laurentiis has the potential to top them all, thanks to her exclusive arrangement with Target. She graced the cover of the retailer’s circular this week with two additional pages inside the front cover devoted to the wide range of products that comprise her signature line. Giada got the star treatment also in stores (see below), where Target used her radiant likeness to call attention to a product assortment designed to blend design, utility and affordability.
The relationship is a win for both parties. Target gains the newness and star power of a celebrity brand that should resonate well with its core customers while Laurentiis’ star power, not to mention her bank account, stands to benefit from the massive levels of increased exposure she will gain courtesy of Target. And that’s even if the products are a dud, which they most definitely are not from a quality standpoint. Let’s face it, there are plenty of celebrity chefs out there who took the easy money and allowed their mug to be slapped on a set of pots and pans, whereas Laurentiis and Target appear to be taking a longer view and creating a differentiated lifestyle brand.