DISTRESSED DAILY: Gap Grapples With Rough Retail Environment

Gap Inc. is contending with a challenging retail environment, which may make it hard to improve its “weaker than expected” credit metrics and operating performance, according to Moody’s Investors Service.

The credit grader said in a report this week that inflation and more promotions have hurt Gap’s profitability, while supply chain bottlenecks and management blunders, particularly at the company’s Old Navy brand, caused inventory of items like activewear and fleece to swell just as demand crested. The clothing retailer is still struggling to recover from the pandemic, which roiled demand and intensified focus on online shopping amid mandatory store shutdowns. ...