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