Fashion
Gap misses quarterly sales estimates on soft apparel demand, warns of tariff hit
By
Reuters
Published
August 29, 2025
Gap on Thursday reported comparable sales below Wall Street estimates as customers pulled back on discretionary spending, and it said U.S. tariffs would squeeze its margins in the current quarter.
Shares of the company were down about 2% in extended trading.
Inflationary prices and uncertainty arising from the Trump administration’s trade policy have curbed consumer spending, challenging CEO Richard Dickson’s turnaround efforts to revitalize its brands.
For the quarter ended August 2, Gap’s comparable sales rose 1%, missing estimates of 2.26% growth, while net sales rose slightly to $3.73 billion, almost in line with analysts’ estimates, according to data compiled by LSEG.
In the quarter, net sales in its cheaper Old Navy and namesake Gap brands ticked up 1% each. But sales fell in its pricier brands Banana Republic and Athleta. Sales in the athleisure brand continued their decline, falling 11%.
“Dickson has delivered on his promise to reinvigorate the Gap brand, though it remains to be seen if or how he can do the same for Athleta, where sales continue to decline,” said Sky Canaves, analyst at EMarketer.
Gap, like rivals including American Eagle, opens new tab and Levi Strauss, has pushed its denim line with a new viral “Better in Denim” campaign featuring the global girl group KATSEYE to bump up sales.
The campaign comes weeks after American Eagle’s “Great Jeans” denim campaign with actress Sydney Sweeney.
The company now expects annual operating margin to be between 6.7% and 7%, compared with 7.4% in 2024.
The forecast includes a tariff impact in the range of 100 to 110 basis points, which translates to a hit of $150 million to $175 million.
Canaves said the company’s profit margins could deteriorate as the year progresses.
“Tariff impacts, combined with a heavily promotional environment during the holidays, squeeze margins further.”
In May, Gap announced $250 million to $300 million in tariff-related costs and aimed to mitigate more than half of that amount while working to reduce exposure to countries struck with high tariffs on imports to the United States.
© Thomson Reuters 2025 All rights reserved.
However, the Conference Board Coincident Economic Index (CEI) for the United Kingdom increased by 0.2 per cent in August 2025 to 108.3 (2016=100), after also no change in July. Overall, the CEI for the UK grew by 0.8 per cent over the six-month period from February to August 2025, on par with the 0.8 per cent increase observed over the previous six-month period between August 2024 and February 2025, The Conference Board said in a press release.
“The UK LEI remained on a downward trend and continued to decline in August,” said Timothy Brennan, economic research associate at The Conference Board. “As in previous months, the weakness came primarily from soft consumer sentiment, lower housing sale expectations, and a rise in unemployment claimants, which more than offset gains from financial components, operating surplus, and productivity. The 6-month growth rate of the UK LEI stayed above the recession threshold, and the warning signal was not triggered either. Still, the LEI reading indicates that economic growth in the United Kingdom will be sluggish through the remainder of 2025 and into 2026. The Bank of England cut the bank rate for the third time this year in August 2025, a move that could help ease economic headwinds. The Conference Board expects UK GDP to grow by 1.3 per cent in 2025 and in 2026.”
The UK Leading Economic Index fell 0.3 per cent in August 2025, signalling continued weakness due to poor consumer sentiment and rising unemployment claims.
Despite this, the Coincident Index rose 0.2 per cent, reflecting modest current growth.
The LEI’s six-month decline suggests sluggish economic prospects through 2026, though not recessionary.
Fibre2Fashion News Desk (RR)
Published
October 17, 2025
The atmosphere on the forecourt of Villa Noailles was effervescent, with a tightly packed crowd delighted to be back together again this year at the Hyères International Festival of Fashion, Photography and Accessories. Yet this must-attend event for fashion and emerging talent had been under threat from a severe budget crisis. In the crowd, there was palpable relief and a determination to do everything possible to make this 40th edition a success.
On the roof of the imposing rationalist building that hosts the event on the heights of Hyères, in the Var, a flag bearing a multicoloured sun flies. The flag was designed by Jean-Charles de Castelbajac, who is on the Fashion competition jury. He stands alongside the other juries and institutional representatives on the new stage set up in the garden for the opening ceremony, set against the backdrop of another large rainbow sun. This new arrangement, a departure from the usual ritual at the villa entrance, gently signals the transition.
“This sun represents what Villa Noailles is all about: dream, creation… It’s the sun that will celebrate this 40th edition,” declared Pascale Mussard, the institution’s president, the first to speak on Thursday evening, thanking “all the people who make the Festival possible”.
The mayor of Hyères, Jean-Pierre Giran, followed suit, thanking, not without a certain emotion, all those present. “There are many of you here, and that’s what matters most, demonstrating your commitment to this project of creativity, modernity and youth,” he told the audience.
“This Festival project is one of a kind, particularly in terms of its reach and longevity,” emphasises Hugo Lucchino, the new general manager of the Villa Noailles art centre, who oversees not only the renowned competition for young designers but also other events such as Design Parade.
Having taken up his post just a few days ago, he pays tribute to his predecessor, Jean-Pierre Blanc, the Festival’s emblematic founder. The mayor and Pascal Morand, executive president of the Fédération de la Haute Couture et de la Mode, also pay tribute.
Before declaring the Festival officially open, Lucchino also thanked, “for their unfailing support,” the partners who have all stepped up at this pivotal moment for Villa Noailles. These include local institutional partners and the French Ministry of Culture, as well as private sponsors such as Chanel, Le 19M, LVMH, Hermès, Supima, Kering, American Vintage and Première Classe, to name but a few.
Support for creativity
“I’m really happy, I feel there’s incredible energy. You can sense that everyone is fully on board. We all want it to continue, because it’s a great festival,” said designer Lutz Huelle, who was on the jury in 2015. “We’re witnessing a kind of ‘reset’. The fact that there’s no jury president this year, but only fashion professionals, is a good idea, because Hyères is, above all, a Festival for young designers and students.”
Mauro Grimaldi, a consultant in the luxury sector who has been attending the event for thirty years, reiterated how important it is to support events of this kind.
“All anyone talks about is money, but it’s crucial to support independent creativity, because the young talent it generates is what feeds the fashion industry. That’s why this is a key edition,” he concluded.
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Copyright © 2025 FashionNetwork.com All rights reserved.
By
Reuters
Published
October 16, 2025
Chinese retailers are stretching their annual “Singles’ Day” sales bonanza to as long as five weeks this year, as the likes of Alibaba and JD.com try to drum up interest from shoppers in a struggling economy.
Weak consumption has dogged the world’s second-largest economy this year as policymakers grapple with U.S. President Donald Trump‘s trade policies, fierce domestic competition, extreme weather and a lingering property crisis.
At a launch event in Shanghai on Thursday, Alibaba touted an “unprecedented” investment in the industry’s biggest sales event of the year, including 50 billion yuan ($7 billion) of subsidies for its top spending 88VIP members.
Its sales period began on Wednesday evening and will run like the rest of the industry until November 11, the original Singles’ Day – named after the digits in the date.
According to Alibaba, 35 brands including Nike, L’Oreal and local firms Anta and Proya sold more than 100 million yuan of merchandise in the first hour of the sale.
As well as subsidies and coupons, Alibaba has embedded artificial intelligence tools into search and recommendation functions. The new AI-powered system is expected to lift click-through rates by about 10%.
Instant retail – one-hour delivery of online orders – is also a focus this year. Alibaba and JD.com have poured billions into subsidies to attract shoppers to rapid delivery channels, which have been growing faster than e-commerce overall.
JD.com launched its campaign on October 9, coinciding with China’s return to work after the eight-day Golden Week holiday, while ByteDance’s Douyin, the domestic sister app to TikTok, also began its promotions that day.
Spending during Golden Week fell to a three-year low even though travel increased — a worrying sign ahead of Singles’ Day promotions. And longer promotions this year may not persuade shoppers to spend more.
“It has been less exciting than ever,” said Deng Lei, a 49-year-old who runs a meditation studio in Beijing. “The only thing I’m looking for is a pair of comfortable sports shoes, but I haven’t spotted any I really like yet.”
At a press briefing on Tuesday, JD.com said it would list over 100,000 “hit” products at its lowest prices of the year and sell 50,000 pairs of thermal long johns at 2 yuan ($0.30) each, shipping included.
Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, said products that help consumers “look good, feel good” – such as beauty brands, outerwear and packaged food and drink – are likely to outperform this year.
But home appliances, which boomed in 2024 amid government subsidies, are expected to decline. Nomura analysts forecast home appliance sales will fall 20% in the fourth quarter.
“Maybe people don’t buy that appliance this year, but they upgrade their phone,” Cooke said, citing new Apple models as likely to drive demand.
© Thomson Reuters 2025 All rights reserved.
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