The Gap Trips On Its Upscale Step

What do women want? Lately, Gap merchandisers don't seem to know. On Sept. 26, the ubiquitous retail chain told analysts it expects same-store sales to be "modest" in September, after a 5% plunge in August. Turns out its bold move into higher-end, higher-margin women's fashion is fizzling. "Last year, they hit a home run on fashion. This year, they've struck out," says NatWest Securities analyst Robert F. Buchanan. Gap shares took a hit on the news but recovered Sept. 28, when analysts raised their rating on the stock.

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