Originally Posted By Jim in Merced CA Paul Pressler's reign over Disney is considered to be a dismal chapter in the company's history. Seems he's doing the same at The Gap. <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/01/11/BUG9DNGKI91.DTL&hw=Paul+Pressler&sn=001&sc=1000" target="_blank">http://www.sfgate.com/cgi-bin/ article.cgi?f=/c/a/2007/01/11/BUG9DNGKI91.DTL&hw=Paul+Pressler&sn=001&sc=1000</a> <Less than a week after reporting lackluster holiday sales, Gap engineered the latest in a series of management shakeups, this one involving the departures of two executives from the company's design and merchandising divisions. Denise Johnston, president of the Gap Adult division, and Ivy Ross, vice president of product design for Old Navy, will both leave the company this month. The two had served in their positions for only a short time. The San Francisco retailer hired Ross from Mattel three years ago. Johnston was recruited from Liz Claiborne less than a year ago. Gap has not found a replacement for either woman, but on Wednesday named Karyn Hillman as senior vice president of merchandising for Gap Adult. Hillman previously had the same title at Banana Republic, the only division of Gap that has been performing well. The management changes come after Gap reported another month of slumping sales and amid growing speculation that the apparel chain will be bought by a private equity firm. The speculation stems from reports that Gap has hired investment firm Goldman Sachs to explore "strategic alternatives," often taken to mean a sale. Gap has dismissed them up as rumors. Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm, compared Gap to the Titanic, with little hope of saving the sinking ship. "People have been going out and in at a record pace," Davidowitz said. "The company is in complete turmoil. Turnover is adding to the turmoil." Gap has seen a parade of executives come and go since Chief Executive Officer Paul Pressler took over in 2002. Some of the most recognized names in the company have left, including Jenny Ming, president of the Old Navy division, who stepped down in October. She was replaced by department store veteran Dawn Robertson.>
Originally Posted By Jim in Merced CA Sorry missed these gem paragraphs from the same story above... <Davidowitz said that with so much executive turnover, it will be very difficult for Gap to establish any momentum. "You end up bringing in new people constantly, and they take six months to find the bathroom," he said. "All this spinning and turning is detrimental." Some wonder whether Pressler will be the next to go. Davidowitz said that if the company is bought, Pressler will surely be among the casualties. "But I think nobody is going to buy the Gap," he said. "I don't think anyone is that crazy.">
Originally Posted By Jim in Merced CA Another story about Paul Pressler. Why am I adding these stories? I think he sucks as an executive, and all the griping people did about him while at Disney was probably warranted. <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/01/05/BUGUKNCDSB1.DTL&hw=Paul+Pressler&sn=007&sc=290" target="_blank">http://www.sfgate.com/cgi-bin/ article.cgi?f=/c/a/2007/01/05/BUGUKNCDSB1.DTL&hw=Paul+Pressler&sn=007&sc=290</a> <Retailers posted modest gains in December after caving in to shoppers who held out for big discounts before splurging on the holidays. Although expectations were never all that high, some retailers hoped for better numbers in December than they posted. The International Council of Shopping Centers reported an industrywide increase of 3.1 percent in same-store sales, or sales at stores open at least a year. That was in line with its original forecast. For November and December combined, same-store sales grew 2.8 percent, which is less than last year's increase of 3.6 percent in the same period and considerably lower than the 3.9 percent increase from January through October of this year. The numbers do not include online sales. Apparel chains were especially hurt by last month's warm weather, which left thick sweaters and wool coats in untouched piles even after they were marked down. San Francisco retailer Gap Inc. posted a same-store sales decline of 8 percent, compared with a 9 percent drop in December 2005. The only Gap division that posted higher sales was Banana Republic, where same-store sales jumped by 2 percent, compared with a 5 percent decrease a year ago in December. But sales at Gap stores fell 9 percent, compared with a 10 percent decline a year earlier, and Old Navy fell 10 percent, the same as the previous year. "We are clearly disappointed with Gap and Old Navy's holiday sales and overall performance for the year," Paul Pressler, the company's chief executive officer, said in a statement. "Given that we did not gain the traction we had expected, the management team, with the active involvement of our board of directors, is currently reviewing Gap and Old Navy's brand strategies." Gap has revised its earnings forecast for the year, lowering it to an estimated 83 to 87 cents per share from $1.01 to $1.06. Richard Jaffe, a retail analyst for Stifel Nicolaus, who downgraded Gap on Thursday from "buy" to "hold," wrote in his research note that "after two years of efforts, Gap has failed to improve the offerings sufficiently to stem the decline of sales and traffic at both the Old Navy and Gap divisions." Jaffe said that while Banana Republic's results have improved significantly, the victory is hollow because the division comprises only 15 percent of the company's sales. Although the industry as a whole did not look as bleak as Gap in December, chief economist Mike Niemira of the International Council of Shopping Centers said that retailers were buoyed by luxury chain stores and wholesale clubs, which performed particularly well. Same-store sales at luxury stores shot up by 8.2 percent while wholesale clubs saw an increase of 6.2 percent. Discount chain Wal-Mart, however, turned out to be a drag on the industry, posting a gain of only 1.3 percent in December. In November, the company's same-store sales fell by 0.1 percent -- its first monthly sales decline in a decade. Excluding Wal-Mart from the picture, same-store sales for the industry would have increased by 4.1 percent in December. "Wal-Mart has lost its bellwether quality," Niemira said. "It's no longer the representative retailer. It's still a huge retailer, but it doesn't reflect the larger trend." Target fared much better than Wal-Mart in December, with same-store sales up 4.1 percent but slipping from its 5.9 percent increase in November. J.C. Penney's same-store sales climbed 2.6 percent in December and Kohl's climbed by 3 percent. Stephanie Hoff, senior analyst for Edward Jones, said that because factors like falling oil prices should have worked in Wal-Mart's favor, it is somewhat puzzling that the company did not see a bigger increase in same-store sales. Nonetheless, she said, she expects the discount chain's sales to improve in 2007.>
Originally Posted By Jim in Merced CA The funny thing is, I have more Gap merchandise in my wardrobe right now than I have in the last 5 years? Whassupwidat?
Originally Posted By SFH If need be, Paul and his friends will move on to another corporation, where the Board there will give him millions of dollars. It is interesting to watch this cycle repeat. SFH
Originally Posted By Dabob2 <retailers were buoyed by luxury chain stores and wholesale clubs, which performed particularly well. Same-store sales at luxury stores shot up by 8.2 percent while wholesale clubs saw an increase of 6.2 percent.> A canary in the coal mine? An indication of a growth in the wealthy and in the poor, while the middle class slowly shrinks? vbdad?
Originally Posted By Jim in Merced CA I know so many people who are in the higher-end of the middle class, and they shop at Costco and Wal-Mart like they're paupers. All to save $4.75 on toilet paper and kitty litter. To me, it's worth NOT going to Wal-Mart, just to not have to put up with the crappy experience there.
Originally Posted By melekalikimaka I feel the same way, Jim. Luckily we have a nice, clean Target 10 minutes from here so I don't have to drive for a half an hour to get to the closest Wal-Mart. In October I was near Wal-Mart and thought I'd zip in and see what Halloween decor they had. It was awful in there, packed full of rude people, junky merchandise thrown all over the place. Even my 8 year old daughter thought the place was a dump. It was pretty funny to hear her reaction to it.
Originally Posted By avromark ^^^ Bear in mind even Wal-Mart's have good stores in the chain 2 of the 3 Wal-Marts in my city are very dirty and full of rude people, the 3rd (By my parents, not the closest one to me) is an immaculate well stocked store with some of the nicest staff in the city. Same with the GAP, one location is decent, the others blah. Of course I wonder what Mr. Pressler's job prospects are like now.
Originally Posted By mrichmondj To be fair, clothing retailers across the board had dismal results this holiday season. Even Abercrombie, which has been one of the clothing retailer darlings, posted sales declines. Gap has been struggling for much longer -- a trend that began before Pressler showed up on the scene. The company is in better financial condition from a balance sheet perspective from when Pressler took over, but sales continue to decline. The biggest problem with Gap is that it has too many aging stores in aging shopping malls. Mall traffic is declining across America as shoppers flock to the big box stores like Wal Mart and Target. I'm not sure any executive could effectively fix Gap's problems. I've never thought their merchandise was of very high quality -- I think Target is probably a comparable retailer of apparel in comparison. It's especially hard to increase your sales when your stores are located in retail areas that are showing traffic declines. Even harder when your brand is aging and losing it's appeal. I'm no fan of Paul Pressler, but I'm not sure Gap has a whole lot of potential for future success under any executive. Their business model simply can't compete with the Targets, Kohl's, and Wal-Mart's that are the king of retail these days. Their fashions aren't high-end enough to attract a premium price or attention of wealthier shoppers.
Originally Posted By Jim in Merced CA My point about Wal-Mart is that just because it and other deep-discount stores are seeing increases in sales, doesn't mean that poor people are using them exclusively. Heck, they even show celebrities who have 10s of millions of dollar shopping at Wal-Mart.
Originally Posted By Jim in Merced CA <I've never thought their merchandise was of very high quality -- I think Target is probably a comparable retailer of apparel in comparison.> If you're talking The Gap vs. Target, I respectfully disagree. The Gap has better quality clothing than Target, in my opinion. If you're saying Old Navy vs. Target, then I would say yes -- they're both about equal. I think the clothes at Old Navy are poorly made, poorly cut, and don't last. I've only recently discovered the beauty of higher-quality clothing. There is a difference between a Lacoste polo shirt and a polo shirt from 'Hudson Bay' sold at Kohl's -- another store where I can never find anything that I would want to wear. And there's a big difference between a pair of Lucky Jeans, and a pair of Mossimo jeans you'd buy at Target. And there's no way in heck I'd buy clothes at Wal-Mart.
Originally Posted By trekkeruss <<I know so many people who are in the higher-end of the middle class, and they shop at Costco and Wal-Mart like they're paupers. All to save $4.75 on toilet paper and kitty litter.>> That's one of the reasons my parents got themselves into the higher end of the middle class. My mom is happy to find and wear clothes from the 75%-off racks at WM or Target.
Originally Posted By mrichmondj I'd be interested to know exactly what people consider the "higher end of the middle class." Is it defined by income? Or defined by the things people have and where they shop? If I shop at Wal-Mart and buy cheap clothes and toilet paper, but drive a fancy BMW or live in a McMansion built by a cookie cutter home builder does that put me in the higher end? If I have the same income, but shop at a regular grocery store, drive a Chevy, and live in a non-descript home in an established neighborhood does that put me in the lower end of the middle class just based on the perception on how I am spending my money? I suspect that there a lot of people with the BMW in the driveway who perceive themselves to be in the higher-end of the middle class, but when you actually start to count up the money they have in the bank you find that they don't have a whole lot of affluence that really matters when the going gets tough.
Originally Posted By oc_dean Maybe Paul and Cynthia need that "extended" Stay At Home To Be With Family period... and Cynthia can do her artwork - permanently.
Originally Posted By Jim in Merced CA I'm just not one of those people who try to save money in absolutely every single aspect of my life. I know friends who almost have a compulsion to save money. From the cheapest can of tuna at the grocery store, [2cents les for the off brand] to driving a mile out of the way to get the cheapest gasoline in town [save 2.30], to leaving the least possible tip at a restaurant [8%], to getting the least expensive room in a hotel [Priceline wins by $3.90], going to Costco and buying a $1.00 beverage that everybody shares, and on and on and on. I'm thinking of a person close to me, who wears 'I saved money' like a badge of honor. A married couple, they live in a very nice home, in a very nice neighborhood, have two cars in their household -- but I consider them to be cheap. We went to their home for a bar-be-que not long ago -- spare ribs, burgers, hot dogs, potato salad, beans, a nice spread etc.., About halfway through the mean, I was told [with a large amount of pride], 'This all came from Costco.' Thanks, I thought, glad to know we're worth spending the big bucks on. They took us to lunch recently, and used gift cards that her husband had received from work. They even wanted to give the waiter his tip using the gift card. When we take them to lunch, we just pay, using good old-fashioned greenbacks. Sure, it's okay to be cost-conscious, save money where you can, put some away into a savings plan for the future, but I do think it gets out of balance, and people become downright obsessive about saving money. And understand, I don't come from money. I grew up in a modest home, in a modest, middle class city. And as recently as 10 years ago, I've not had much. And prior to that I was working in an executive job, and on the surface, was 'living the life' but was essentially putting it all on credit cards. And even with all that, I'd still rather not be cheap. So there...
