Strong business position in specialty apparel Geographic diversity Strong cash flow Excellent liquidity Participation in the competitive retail industry Fashion risk and cyclicality inherent in the specialty apparel industry Difficulty in maintaining customer loyalty Need for additional growth vehicles The ratings on San Francisco, Calif.-based The Gap Inc. reflect management's challenge to continue to improve the business position of the company's three core brands in an industry that is intensely competitive, as well as the inherent cyclicality and fashion risk of the industry. These factors are offset, in part, by the company's strong business position in casual apparel, its geographic diversity, and its strong cash flow. Management's initiatives to improve product quality and assortment, store execution, and inventory management, as
