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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (12763)	9/9/2000 12:58:40 PM
From: Steve Grabczyk	Respond to of 18929

Tom: As far as Gap Stores (GPS) goes, it is probably a buying opportunity. Lord knows they are as about as low as ever given their "Logistical errors" related to this Back-to-School season. What I heard in the industry is that Old Navy missed their deliveries for BTS and that is one of the main reasons for the comps being so low in that division. I can't say that is true in fact, but that kind of mistake in execution is extremely unusual in that organization. I'm sure some heads rolled (although Gap never announces those kinds of things as I can recall). Beyond that, Millard (Micky) Drexler is well known not to have much patience with poor execution. In fact, he just gave a talk at a Goldman Sachs gathering yesterday where he laid out 'a turnaround plan'. Here's the text of the news release: NEW YORK (AP)- After a series of missteps that culminated in a 14 percent decline in same store sales in August, The Gap Inc. believes it can reverse its fortunes by better managing its branding and pricing. Speaking at the annual Goldman Sachs Retailing Conference in New York, The Gap's chairman and CEO, Millard Drexler, said he is focused on bringing ``discipline'' back to the San Francisco-based retailer of men's and women's casual clothing. The company's disappointing second-quarter earnings report, released last month, showed a 6 percent decline in earnings. ``We were complacent, even though we are not a complacent company,'' Drexler said Thursday. One of the company's main priorities, he said, is to revitalize Old Navy, its most troublesome division, as ``a family store.'' Old Navy has put too much emphasis on young trendy clothing, ignoring the older customer, he said. ``We love teen-agers but we need to expand our appeal,'' he said. Drexler said advertising for Old Navy will be expanded for the upcoming holiday season. The company partly attributed its lackluster August sales to a shortage of advertising for the back-to-school season. Drexler said the cost of Old Navy apparel will also become more competitive. ``We were a little sloppy with pricing,'' he said. As for The Gap, the flagship division will add a mix of trendy items and basics, such as gabardine pants and khakis. The retailer is also rolling out Gap and Old Navy credit cards, a service it already offers for customers of its Banana Republic division. Mr. Drexler moves very fast when they stumble. That's for sure. Unlike JC Penney which has languished for years. I did take a brief look at their financials and noticed that their Beta is a paltry 1.01. Does that make it an AIM candidate? Anyway, Probably a value play right now, but not an AIM stock. They are priced at a 2 year low. Last time they were near 20 (split adjusted), was in March of 98. Regards, Steve