NEW YORK—Inflation-weary U.S. shoppers have been skimping on clothing purchases, prompting retailers to slash prices to clear inventory off the racks.
Gap was the latest retailer to report a slump in apparel shopping for the second-quarter, saying on Thursday that net sales slumped 8 percent from a year earlier to $3.86 billion. Earlier this month, executives at U.S. giants Walmart and Target offered deep discounts and rollbacks on clothing.
Gap is “taking actions to sequentially reduce inventory, rebalance our assortments to better meet changing consumer needs,” Katrina O’Connell, Gap Inc. chief financial officer, said in a statement.
Deep discounts on apparel, especially at Old Navy, hurt the company’s margins. Old Navy stores were not able to sell certain sizes and styles, while Gap struggled with mix imbalances for items including “mid-tops and casual shorts,” O’Connell said….