Wall Street Rekindled Enthusiasm For GAP

Wall Street has turned its attention recently.

The group is going to buy it before the stock price rises again.

Adrienne Yih, a Wolfe Research analyst at the research firm, recently raised the ratings of the Gap group, saying it was the United States.

The target price of the company's stock will reach 30 US dollars.

those under one's command

The rising trend of Old Navy is the main reason for giving such a high estimate.

Some investment institutions started early.

Beddow Capital Management purchased 7700 shares in the first quarter for 226 thousand US dollars, and Vanguard Group added 2 million 744 thousand shares, totaling 454 million US dollars; AIG also repurchased 12 million 810 thousand shares in the first quarter.

In the short term, they are undoubtedly the winners of this gamble.

Just a few weeks ago, Gap group gave the sales figures for June this year.

No exaggeration, this is a good news after 15 months - revenue rose 2% over the same period last year, reaching 1 billion 570 million yuan (about 10 billion 473 million yuan).

"Old Navy is outstanding," said Sabrina Simmons, chief financial officer of the company. The brand Gap of the group declined by 1% compared with the same period last year, Banana Republic declined by 4%, Old Navy increased by 5%.

After the figures were released, Gap group's share price rose 7%.

For investors, the slow waiting period is coming to an end.

Gap brand was first established in San Francisco, United States, and once succeeded in grasping the young people who are in the forefront of the trend in 1990s.

But in the face of H&M, Zara, UNIQLO and other rising stars, it appears increasingly weak.

Last year, when the new CEO Art Peck took office, its first move was to shut down 175 shops in North America (1/4) and cut 250 employees at headquarters.

"Gap women's business is very difficult, and I have been faced with challenges for several quarters. I am disappointed but not surprised."

The reason why Art Peck is "not surprised" is that the overall situation of the American Apparel Retailing industry is not optimistic, including the American trademark brands such as Abercrombie & Fitch and J.Crew, which are facing the colder situation of the market.

But Gap group also suffered high-level losses: Stefan Navy, who had led Old Navy for three consecutive years to achieve profit growth, was dug to Ralph Lauren.

Creative director of Banana Republic also said he would leave office and focus on his brand operation.

This also seems to explain why the goal of Art Peck has not been reached. When he took office in 2015, he made a pledge that the company would reverse the situation in the first half of this year.

Until the Gap group released its first quarter report in May, sales remained unchanged and profits fell by 46.8% over the same period last year.

Revenue from Gap, Banana Republic and Old Navy decreased by 3%, 11% and 6% respectively.

The company immediately announced the closing of about 75 stores, including 53 Japanese Old Navy.

But now it seems that the effect of stopping blood is quite obvious.

Adrienne Yih analysis said that although the loss of 75 stores means that the brand loses 250 million yuan (1 billion 667 million yuan) on its books every year, it actually saves 275 million yuan (1 billion 834 million yuan) for the company.