On April 7, 2006, Standard & Poor's Ratings Services revised its outlook on San Francisco-based The Gap Inc. to negative from stable. Our ratings on the company, including the 'BBB-' corporate credit rating, were affirmed. The outlook revision is based on a continuation of negative sales trends. The company has had difficulty retaining customers as its merchandise line has been too basic and too value-oriented. Traffic in March was down double digits in all three brands. Although, Gap's financial profile remains strong for the rating category, these measures are expected to deteriorate unless the company reverses its negative operating trends. In addition, the company's merchandising issues increase business risk. The ratings on The Gap reflect the company's good business position
