US chain's future is uncertain as dismal Christmas sales follow decade of slow, steady, decline.The statistics tell a story of this decline.In 23 out of the last 24 months, Gap's like-for-like sales have fallen. Its December sales were $2.34bn (£1.2bn), down 10% on 2004 and its shares are less than half the level of their peak in 2000.
Gap has always been viewed as one of corporate America's biggest success stories. From its 1960s bohemian West Coast origins, it grew into a global giant with more than 3,000 stores and annual sales of $16 billion.For years, Gap's khakis, denims and white T-shirts defined the very essence of laid-back, vaguely louche, preppy American-ness.
Experts say the rot set in 10 years ago. Robert Buchanan, a retail analyst at the American stockbroker AG Edwards, says: "In their heyday, they were really good at taking care of the baby boomer customer who, about 10 years ago, stopped spending as much time and money in the middle of the mall.They stopped targeting them and started aiming for the children of the boomers – but not having done much research, they blew it. Then they took a democratic approach and tried to be all things to all men. If there's one thing that doesn't work in retailing, it's a lack of focus."
The chain's easy fitting jeans, its forest of khaki and its simple T-shirts were wardrobe staples on both sides of the Atlantic. But after a long decline, the future of the American chain is in doubt as its founders ponder a sale or a break-up of the retail empire.
It emerged this week that California-based Gap had called in investment bank Goldman Sachs to review its options. A catastrophic Christmas has proved the last straw after two years of stubbornly falling sales – including an alarming slump in takings at its 134 stores in Britain.