The ratings on The Gap Inc. reflect its strong business position in the casual apparel industry and Standard & Poor's expectation that the company's leading position will enable it to produce above-average performance measures. The ratings also anticipate that the business will be managed in a financially prudent manner, with an emphasis on debt reduction in the near term. The Gap has retained a leadership position as a marketer of private-label, moderately priced, good-quality sportswear and accessories. Operating margins have remained in the 20% to 25% range over the past five years. By developing diverse formats for different age groups and income levels, The Gap aims to balance the more mature traditional Gap stores with the higher-growth Old Navy stores
