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Gap to Sell Up?

The casual clothing chain store, Gap, is considering a sale of the company, according to people present at a brief on the matter. The chain, which was started in San Francisco by a husband and wife, has been selling fashionable T-Shirts, Polo Shirts, jeans and khakis since 1969, and has now hired Goldman Sachs to work out sales strategies, one of which would be to sell its 3,000 stores.

The move to hire Sachs came about after figures from December showed a drop in sales of 8%. Sachs will be conducting a full review of the company’s business lines, and compiling a full report to present to directors. The report is not expected to be completed until the end of the month at the earliest.

Gap’s current market value is $16.4 billion, and a figure of more than $18 billion dollars is what analysts say a buyer would have to offer to tempt a sale. This would make the sale of Gap one of the largest retail buyouts in history.

Sales have fallen every month for the last year for Gap. Constant experiments with clothing designs and shop layouts have left customers confused. Over the summer, the basic style Polo Shirts and jeans that were sold in the 1980’s and 1990’s were on display. The reasons for a return to designs far out-dated remain unknown, as Gap’s spokesman, Greg Rossiter, says the company will not comment.

The very possibility of a sale, even though only a consideration at the present time, points to one fact; the current management may be unable to turn the companies nose-diving profits around.

The Fisher family, who founded the company and control more than 30% of its stock, will make the ultimate decision about any sale. A person close to the family said that the Fishers were more likely to sell the company as a whole, rather than sell it in pieces.