Cost cuts help lift Gap's profits

Gap is continuing efforts to turnaround its fortunes

Clothing retailer Gap has reported a 26% rise in profits after cost-cutting, restructuring work and tighter stock control helped offset falling sales.

The US firm saw its profit for the three months to 30 September rise to $238m (£116m) from $189m for the same third quarter period last year.

Gap said same-store sales, which excludes new openings, fell 5%, the same decline seen a year earlier.

It recently pledged to do more to stop child labour at its Indian suppliers.

Gap made that statement last week after it emerged that one of its Indian suppliers had been employing children as young as 10.

Job cuts

The retailer, which has more than 3,100 stores worldwide, achieved overall third-quarter sales of $3.85bn, the same as last year.

The results were slightly better than market expectations.

Gap, whose new chief executive Glenn Murphy took over in July, is continuing its efforts to revive its fortunes.

The company has cut jobs and shut its Forth & Towne subsidiary to focus on its main stores and Old Navy outlets.

Mr Murphy said the firm faced a "tough economic environment" for the coming festive sales season.