Banana Republic sales continue to slump

The Banana Republic sales, one of the major brands of retailer Gap Inc, continue to dip. The latest numbers for October showed a further drop in sales across 3,700 stores.

However, on a constant-currency basis, sales were flat but missed the Wall Street forecast for the quarter ending November. Banana Republic's sales fell 15 percent while Old Navy rose two percent.

On overall sales, the Gap brand dropped four percent during the quarter. Banana Republic is in the process of redesign product range to match the changing customer tastes.

For the quarter ending November, Gap projected earnings per share in the range of 62 cents to 63 cents, which is lower than the average forecast of 66 cents a share by analysts in a poll conducted by Thomson Reuters.

Sales dropped three percent to $3.86 billion, as against the forecast of $3.93 billion.

According to The Wall Street Journal (WSJ) report, Gap Inc has been suffering sluggish retail sales including brands Old Navy and Banana Republic. The retailer has also witnessed a series of fashion mis-hits.

The Gap Inc's stock has been under pressure. Owing to a bleak sales performance for the past few quarters, the head of Old Navy division switched over to Ralph Lauren Corp.

Gap Inc is facing two major factors that are out of control. The first reason being the low level of consumer spending and the second reason is the weather warmer than usual fall.

The winter is not that cold and this weather condition influenced customers to postpone their buying plans for winter clothes. As a result, the sales of new coats, scarves and other cold weather clothing were sluggish.

Banana Republic's sales fell 12 percent in the quarter ending November 2015. Art Peck, CEO, Gap Inc, seems to be not happy as he answers investors during the earnings calls as reported by Business Pundit.

"I am very disappointed by the deceleration that we have seen, particularly with Banana in the back half. That's been a real disappointment to me and a bit of surprise. Banana Republic prides itself on selling updated classics with a twist."

Banana Republic witnessed a double digit drop for the consecutive fourth month. The comparable sales fell 15 percent. According to a report by Fortune, the performance of Banana Republic has been under pressure by product acceptance challenges.

According to data from Fortune, the sales of Banana Republic were positive for just two months this year so far. Sales rose two percent in January 2015 and one percent in June.

During April and November, sales declined the most at 15 percent. Banana Republic is in the process of changing its manufacturing model to attract buyers.

Gap Inc forecasts year-over-year inventory dollars per story marginally less than previously projected. The sales fell three percent in October.

However, Gap Inc didn't include the number of stores closed down and new stores opened up. Overall sales performance, Gap Inc has been suffering sluggish sales for the past seven months in a row.