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Bankruptcy May Be Your Option

Industry professionals predict bankruptcy in Gap's future

The past several years have proved troublesome for a variety of different businesses in Oklahoma and across the country. Many are unable to generate the necessary sales needed to keep investors happy, while fulfilling their various financial obligations. While several retailers have filed for bankruptcy recently, representatives for Gap, Inc., speak positively of the company's financial situation. However, some industry professionals predict that the company cannot continue to survive without seeking restructuring through bankruptcy.

Some reports indicate that the company has been struggling with sales for the last 14 months -- at which time the company saw its last sales increase. Last year, the company saw a 4 percent decrease in sales, and the first three months of 2016 indicates more of the same. Even if the company makes drastic changes, such as revitalizating its merchandise, some claim it will be difficult for it to recover.

While many businesses have switched their focus to e-commerce, Gap stores still rely mainly on brick-and-mortar locations in malls. However, Gap is increasingly struggling to maintain sales while competing with online merchandisers, as well as newer chains, such as H&M. While those predicting a bankruptcy filing claim the business will likely remain stable for a few years, they ultimately claim the lack of increasing sales is having an impact on the company's long-term finances.

There are many companies in Oklahoma that are likely closely monitoring their finances and wondering how they will recover from lack of sales. As certain professionals familiar with bankruptcy are claiming about Gap, sometimes the best, and sometimes only option, to manage debt is to seek bankruptcy protection. By doing so, companies are able to restructure their debt in a way that it becomes more manageable.

Source: sfchronicle.com, "Gap's future lies with Bankruptcy Court", Thomas Lee, May 25, 2016

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