"Bleeding Retailer Scrambles Ahead of Make-or-Break Holiday Season," is part of the sub-headline on an article in today's Wall Street Journal about Gap, Inc. The article is accompanied by a graphic showing declining sales at Gap. If you made the graphic about corporate net income rather than sales at one division, though, here's what it would show:
2006 $778 million
2007 $833 million
2008 $967 million
2009 $1.102 billion
2010 $1.204 billion
I'd like to be "bleeding" like that!
In fairness, the article acknowledges that the CEO "has won praise for improving operations and profitability at the company." And because the Gap corporation and its Gap unit have the same name, it can be confusing — Gap, Inc. may be prospering while its Gap unit is bleeding. Still, it's another example of the Wall Street Journal retail coverage focusing on sales or profitability depending on which holds more bad news for the company being covered.
The article, which for all its negativity actually also includes some interesting color about the CEO, goes on to claim that the Gap brand "is stuck in American retail's hollowed-out midsection, which consumers have been abandoning for years as they split their dollars between cheap basics and must-have luxury items." Try visiting a Gap factory outlet store on a weekend. There's a line to get to the cash register, and a lot of what people are buying is cheap basics. I bought a 100% cotton red polo shirt for $4.99. It doesn't get much more cheap or more basic than that.
Disclosure: I own some Gap stock, and I sometimes shop at the factory outlet stores.