Standard & Poor's Ratings Services said today that The Gap Inc.'s (BB+/Negative/--) comparable-store sales decline of 8% in July has no immediate effect on the company's credit rating or outlook. By division, same-store sales dropped 19% at Gap Domestic, 12% at Gap International, and 6% at Banana Republic, but were positive 6% at Old Navy. All three of the company's domestic brands recorded a decline in traffic. Nevertheless, the company achieved better merchandising margins at all its domestic divisions. Standard & Poor's expects the company will remain very challenged in the near term because consumers have responded poorly to The Gap's merchandising offerings for more than two years, and the company has had to mark down a significant amount of
