The ratings on The Gap Inc. were placed on CreditWatch with negative implications Aug. 9, 2001. The CreditWatch placement is based on disappointing sales to date in 2001 and Standard & Poor's concern that this trend may persist to the detriment of earnings and credit protection measures. The Gap continues to have merchandising problems and Standard & Poor's believes improvements in comparable store sales trends in the second half of 2001 may be more difficult to achieve, especially given the weak economic environment in the U.S. The Gap's same-store sales dropped 12% in July 2001 and 8% year-to-date in 2001 compared to the previous year. The sales decline is due to the confluence of poor execution by The Gap, a
