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Non-Tech : The Gap -- Ignore unavailable to you. Want to Upgrade?

To: Beltropolis Boy who wrote (70)	7/11/1999 12:29:00 AM
From: Brian Malloy	Respond to of 189

The LEAPS are up 50% in two months so no complaint. Those wanting to make an entry should probably wait for an inevitable market sell off somewhere in the July-Oct and be in the stock NLT Oct Nov. After visiting Old Navy stores in several cities and talking to sales staff and watching customer flow, I would have to agree with rising demand in that area. I think old Navy is actually siphoning off some of the GAP stores business. At least it all stays in the family. I was also struck by the number of buying customers that were say 40-60+ in the stores that were buying for themselves. GPS appears to be emphasizing the roll out Old Navy stores at this juncture. However, it is the youngest brand so that may not have much significance. Based on my hip pocket check Old Navy has accelerating sales Banana Rep. has more modest sales increases Gap has flat to maybe modest decreases in sales. Bottom line, people are buying clothes this year after taking a clothing holiday in '98 so to speak. Across the board, the specialty retailers are doing pretty good, the sector is hot so I'm there. I will be taking some profits in GPS over the coming weeks and return to a full position when I think a relative bottom is seen.

To: Beltropolis Boy who wrote (70)	7/11/1999 7:02:00 PM
From: HRM	Read Replies (1) \| Respond to of 189

<<curious: any concerns over the latest quarterly numbers? year-over-year Some good comments. I went back in particularly and looked at your question relating to sales growth vs inventory growth to help me put things in perspective. The first table takes the ratio of the growth in sales over the growth in inventories for sequential quarters. ie, a number < 1.0 indicates inventories growing faster than sales. A clear seasonal pattern is evident and the April quarterly numbers are a little low but close to prior years. Ratio of Growth in Sales to Growth in Inventories (Sequential Quarters) 1999 1998 1997 1996 1Q 66.3% 70.7% 68.0% 72.1% 2Q 82.7% 86.7% 86.0% 3Q 101.0% 106.0% 99.4% 4Q 164.3% 164.0% 148.3% The second table takes the same ratio of the growth in sales over the growth in inventories for current vs prior year quarters. Again, a number < 1.0 indicates inventories growing faster than sales. This one is a little harder for me to decipher. It might be impacted by several factors, but nothing in particular jumped out at me. Ratio of Growth in Sales to Growth in Inventories (Curr Qtr to Prior Yr Qtr) 1999 1998 1997 1996 1Q 91.0% 106.7% 86.1% 2Q 101.7% 86.9% 3Q 96.9% 92.7% 4Q 97.1% 102.5% 91.4% Overall, I came away with a little more comfort with the numbers, although they bear watching. FWIW Harry