Cost-cutting boosts Gap profits

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Clothing retailer Gap has reported a 19% rise in quarterly profits, as its continuing cost-cutting measures offset a continuing fall in sales.

For the three months to 4 August, the US firm made a net profit of $152m (Â£66m), up from $128m a year earlier.

While same-store sales - those at its outlets open more than 12 months - fell 5%, overall sales dropped 1% to $3.7bn.

Gap said it was improving its clothing lines and more carefully targeting consumers in their 20s.

'Solid progress'

The firm has battled falling sales for more than a year, as it has tried to regain its former market dominance.

Gap said that during the three months, its fiscal second quarter, it "had made solid progress" stabilising and streamlining its business.

This has included the closure of its former Forth & Towne division.

Gap also announced plans to return $1.5bn to shareholders through a share buyback scheme.