Gap, Ross Surge as Discount Format Still Luring in Shoppers

(Bloomberg)—Gap Inc. and Ross Stores Inc. are showing that growth is possible for apparel retailers. You just have to offer cut-rate prices.

Both apparel companies saw their shares spike on Friday after posting comparable sales that exceeded analyst estimates. Gap relied on its budget-minded Old Navy chain for growth. Ross, meanwhile, used its off-price strategy to outperform expectations despite the hurricanes that battered Texas and Florida.

The results indicate that Americans are still willing to hit the mall and stock up on apparel, if they feel like they’re getting a deal. While many shoppers increasingly prefer to order their clothes online, Ross and Old Navy show that low prices remain a brick-and-mortar draw — especially for families and younger shoppers.

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