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The Gap

As Reported Annual Cash FlowScale

Net earnings (loss)Depreciation & amortizationTax benef fr exer of stk opt & restricted stkDeferred income taxes

Loss on disposal & oth non-cash affctg earnsMerchandise inventoryPrepaid expenses & other current assets

Accounts payableAccrued expenses

Income taxes payableLease incentive & other liabilitiesNet cash flows from operating activitiesCHECK

Purchase of property & equipment

Proceeds from sale of property & equipmentPurchase of short-term investmentsMaturities & sales of short-term investmentsRestricted cashAcquisition of lease rights, net incr (decr)Other assetsNet cash flows from investing activities

CHECK

Net increase (decrease) in notes payableNet issuance of long-term debtPayments of long-term debtRestricted cash

Issuance of common stock

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Net purchase of treasury stock

Excess tax benefit from exercise of stock optCash dividends paidNet cash flows from financing activitiesCHECK

Effect of exchange rate fluctuations on cash

Net increase (decrease) in cash & equivalentsCHECK

Cash & equivalents at beginning of yearCash & equivalents at end of year

Interest expense paidIncome taxes paid

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1/29/2005 1/31/2004 2/1/2003 2/2/2002 2/3/2001Thousands Thousands Thousand Thousand Thousands

1,150,000 1,030,000 477,457 -7,764 877,497620,000 664,000 780,876 810,486 590,36531,000 7,000 44,219 58,444 130,882

-80,000 103,000 6,090 -28,512 -38,872

21,000 70,000 117,256 0 0-90,000 385,000 -258,222 213,067 -454,595-18,000 5,000 32,802 -13,303 -61,096

42,000 -10,000 -46,669 42,205 249,545-3,000 -79,000 135,733 220,826 -48,046

-112,000 0 0 0 -8,49559,000 -4,000 -51,186 22,390 54,020

1,620,000 2,171,000 1,238,356 1,317,839 1,291,2050 0 0 0 0

-442,000 -272,000 -303,284 -940,078 -1,858,662

0 1,000 8,513 0 0-1,813,000 -1,202,000 0 0 02,072,000 442,000 0 0 0

337,000 0 0 0 00 5,000 3,416 -10,549 -16,252

6,000 0 0 0 0160,000 -1,026,000 -291,355 -950,627 -1,874,914

0 0 0 0 0

0 0 -41,942 -734,927 621,4200 0 1,345,500 1,194,265 250,000

-871,000 -668,000 0 -250,000 00 -1,303,000 0 0 0

130,000 111,000 153,272 139,105 152,105

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1/29/2000 1/30/1999 1/31/1998 2/1/1997Thousands Thousand Thousand Thousands

1,127,065 824,539 533,901 452,859436,184 326,447 269,706 214,905211,891 79,808 23,682 47,348

2,444 -34,766 -13,706 -28,897

0 0 0 0-404,211 -322,287 -156,091 -93,800-55,519 -77,292 -44,736 -16,355

118,121 265,296 63,532 88,53289,071 231,178 107,365 87,974

-94,893 38,805 -8,214 25,70647,775 62,433 69,212 56,681

1,477,928 1,394,161 844,651 834,9530 0 0 0

-1,238,722 -797,592 -465,843 -371,833

0 0 0 00 0 0 00 0 174,709 -11,7740 0 0 0

-39,839 -28,815 -19,779 -12,2060 0 -2,939 -40,120

-1,278,561 -826,407 -313,852 -435,933

0 0 0 0

84,778 1,357 44,462 18,445311,839 0 495,890 0

0 0 0 00 0 0 0

76,211 49,421 30,653 37,053

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-707,125 -892,149 -593,142 -466,741

0 0 0 0-75,795 -76,888 -79,503 -83,854

-310,092 -918,259 -101,640 -495,0970 0 0 0

-4,176 2,589 -1,634 2,155

-114,901 -347,916 427,525 -93,9220 0 0 0

565,253 913,169 485,644 579,566450,352 565,253 913,169 485,644

- - - -- - - -

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The Gap

As Reported Annual Balance SheetScale

Cash & equivalentsShort-term investmentsRestricted cashMerchandise inventory

Other current assetsTotal current assetsProperty & equipment, gross

Accumulated depreciation & amortizationProperty & equipment, net

Other assetsTotal assetsCHECK

Current maturities on long-term debtAccounts payable

Accrued expenses & other current liabilitiesIncome taxes payableTotal current liabilitiesLong-term debt, net of current portionSenior convertible notesLease incentives & other liabilitiesTotal long-term liabilities

Common stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive income (loss)Deferred compensation

Treasury stock, at cost

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Total shareholders' equity

CHECK

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1/29/2005 1/31/2004 2/1/2003 2/2/2002 2/3/2001Thousands Thousands Thousand Thousand Thousand

2,245,000 2,261,000 3,388,514 1,035,749 408,794817,000 1,073,000 0 0 0

1,015,000 1,351,000 0 0 01,814,000 1,704,000 2,047,879 1,677,116 1,904,153

413,000 300,000 303,332 331,685 335,1036,304,000 6,689,000 5,739,725 3,044,550 2,648,0507,169,000 6,979,000 6,826,320 6,619,531 5,901,237

3,793,000 3,611,000 3,049,477 2,458,241 1,893,5523,376,000 3,368,000 3,776,843 4,161,290 4,007,685

368,000 286,000 385,436 385,486 357,17310,048,000 10,343,000 9,902,004 7,591,326 7,012,908

0 0 0 0 0

0 283,000 499,979 41,889 1,029,9041,240,000 1,178,000 1,159,301 1,105,117 1,067,207

924,000 872,000 1,067,294 909,227 684,20978,000 159,000 0 0 17,824

2,242,000 2,492,000 2,726,574 2,056,233 2,799,144513,000 1,107,000 1,515,794 1,961,397 780,246

1,373,000 1,380,000 1,380,000 0 0984,000 581,000 621,424 564,115 505,279

2,870,000 3,068,000 3,517,218 2,525,512 1,285,525

49,000 49,000 48,401 47,430 46,961904,000 732,000 638,306 461,408 294,967

7,181,000 6,241,000 5,289,480 4,890,375 4,974,77348,000 31,000 -16,766 -61,824 -20,173-8,000 -9,000 -13,574 -7,245 -12,162

3,238,000 2,261,000 2,287,635 2,320,563 2,356,127

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4,936,000 4,783,000 3,658,212 3,009,581 2,928,239

0 0 0 0 0

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1/29/2000 1/30/1999 1/31/1998 2/1/1997 2/1/1997Thousand Thousand Thousand Thousands Thousands

450,352 565,253 913,169 485,644 485,6440 0 0 135,632 135,6320 0 0 0 -

1,462,045 1,056,444 733,174 578,765 578,765

285,393 250,127 184,604 129,214 129,2142,197,790 1,871,824 1,830,947 1,329,255 1,329,2554,203,288 3,048,327 2,303,959 1,898,613 1,898,613

1,487,973 1,171,957 938,713 762,893 762,8932,715,315 1,876,370 1,365,246 1,135,720 1,135,720

275,651 215,725 141,309 161,952 161,9525,188,756 3,963,919 3,337,502 2,626,927 2,626,927

0 0 0 0 -

168,961 90,690 84,794 40,050 40,050805,945 684,130 416,976 360,546 360,546

751,710 655,770 406,181 282,494 282,49426,263 122,513 83,597 91,806 91,806

1,752,879 1,553,103 991,548 774,896 774,896784,925 496,455 496,044 0 -

0 0 0 0 -417,907 340,682 265,924 197,561 197,561

1,202,832 837,137 761,968 197,561 197,561

50,368 33,250 32,994 23,840 23,840669,490 365,662 221,890 434,104 434,104

4,172,796 3,121,360 2,392,750 1,938,352 1,938,352-6,759 -12,518 -15,230 -5,187 (5,187)

-23,150 -31,675 -38,167 -47,838 (47,838)

2,629,700 1,902,400 1,010,251 688,801 688,801

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2,233,045 1,573,679 1,583,986 1,654,470 1,654,470

0 0 0 0

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1/31/1998 1/30/1999 1/29/2000 2/3/2001Thousands Thousands Thousands Thousands

913,169 565,253 450,352 408,794- - - -- - - -

733,174 1,056,444 1,462,045 1,904,153

184,604 250,127 285,393 335,1031,830,947 1,871,824 2,197,790 2,648,0502,303,959 3,048,327 4,203,288 5,901,237

938,713 1,171,957 1,487,973 1,893,5521,365,246 1,876,370 2,715,315 4,007,685

141,309 215,725 275,651 357,1733,337,502 3,963,919 5,188,756 7,012,908

- - - -

84,794 90,690 168,961 1,029,904416,976 684,130 805,945 1,067,207

406,181 655,770 751,710 684,20983,597 122,513 26,263 17,824

991,548 1,553,103 1,752,879 2,799,144496,044 496,455 784,925 780,246

- - - -265,924 340,682 417,907 505,279761,968 837,137 1,202,832 1,285,525

32,994 33,250 50,368 46,961221,890 365,662 669,490 294,967

2,392,750 3,121,360 4,172,796 4,974,773(15,230) (12,518) (6,759) (20,173)(38,167) (31,675) (23,150) (12,162)

1,010,251 1,902,400 2,629,700 2,356,127

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1,583,986 1,573,679 2,233,045 2,928,239

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2/2/2002 2/1/2003 1/31/2004 1/29/2005Thousands Thousands Thousands Thousands

1,035,749 3,388,514 2,261,000 2,245,000- - 1,073,000 817,000- - 1,351,000 1,015,000

1,677,116 2,047,879 1,704,000 1,814,000

331,685 303,332 300,000 413,0003,044,550 5,739,725 6,689,000 6,304,0006,619,531 6,826,320 6,979,000 7,169,000

2,458,241 3,049,477 3,611,000 3,793,0004,161,290 3,776,843 3,368,000 3,376,000

385,486 385,436 286,000 368,0007,591,326 9,902,004 10,343,000 10,048,000

- - - -

41,889 499,979 283,000 -1,105,117 1,159,301 1,178,000 1,240,000

909,227 1,067,294 872,000 924,000- - 159,000 78,000

2,056,233 2,726,574 2,492,000 2,242,0001,961,397 1,515,794 1,107,000 513,000

- 1,380,000 1,380,000 1,373,000564,115 621,424 581,000 984,000

2,525,512 3,517,218 3,068,000 2,870,000

47,430 48,401 49,000 49,000461,408 638,306 732,000 904,000

4,890,375 5,289,480 6,241,000 7,181,000(61,824) (16,766) 31,000 48,000

(7,245) (13,574) (9,000) (8,000)

2,320,563 2,287,635 2,261,000 3,238,000

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3,009,581 3,658,212 4,783,000 4,936,000

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The Gap

As Reported Annual Income Statement

Scale

Net sales

Cost of goods sold & occupancy expenses

Gross profit

Operating expenses

Loss on early retirement of debt

Interest expense

Interest incomeEarnings before income taxes

Income taxes

Net earnings (loss)

CHECK

Weighted average shares outstanding-basic

Weighted average shares outstanding-dilutedYear end shares outstanding

Net earnings (loss) per share-basic

Net earnings (loss) per share-diluted

Dividends per share

Total number of employees

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1/29/2005 1/31/2004 2/1/2003 2/2/2002

Thousands Thousands Thousands Thousands

16,267,000 15,854,000 14,454,709 13,847,873

9,886,000 9,886,000 9,541,558 9,704,389

6,381,000 5,968,000 4,913,151 4,143,484

4,296,000 4,089,000 3,900,522 3,805,968

-105,000 0 0 0

167,000 234,000 248,599 109,190

59,000 38,000 36,845 13,3151,872,000 1,683,000 800,875 241,641

722,000 653,000 323,418 249,405

1,150,000 1,030,000 477,457 -7,764

0 0 0 0

893,356.82 892,554.54 875,545.55 860,255.42

991,121.57 988,177.83 881,477.89 860,255.42860,559.08 897,202.49 887,322.71 865,726.89

1.29 1.15 0.55 -0.01

1.21 1.09 0.54 -0.01

0.09 0.9 0.09

152,000 153,000 169,000 165,000

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2/3/2001 1/29/2000 1/30/1999 1/31/1998

Thousands Thousands Thousands Thousands

13,673,460 11,635,398 9,054,462 6,507,825

8,599,442 6,775,262 5,318,218 4,021,541

5,074,018 4,860,136 3,736,244 2,486,284

3,629,257 3,043,432 2,403,365 1,635,017

0 0 0 0

74,891 31,755 13,617 0

12,015 0 0 2,9751,381,885 1,784,949 1,319,262 854,242

504,388 657,884 494,723 320,341

877,497 1,127,065 824,539 533,901

0 0 0 0

849,810.46 853,804.92 864,061.50 891,405

879,137.19 895,029.18 904,374 922,951.50853,996.98 850,498.94 857,959.50 884,505

1.03 1.32 0.953 0.6

1 1.26 0.913 0.58

0.09

166,000 140,000 110,000 81,000

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2/1/1997 2/1/1997 1/31/1998

Thousands Thousands Thousands

5,284,381 5,284,381 6,507,825

3,285,166 3,285,166 4,021,541

1,999,215 1,999,215 2,486,284

1,270,138 1,270,138 1,635,017

0 - -

0 - -

19,450 19,450 2,975748,527 748,527 854,242

295,668 295,668 320,341

452,859 452,859 533,901

0 - -

- -

961,350.75 961,351 891,405

922,952926,494.88 926,495 884,505

- -

0.471 0 0.6

0.58

- -

- -

66,000 66,000 81,000

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1/30/1999 1/29/2000 2/3/2001

Thousands Thousands Thousands

9,054,462 11,635,398 13,673,460

5,318,218 6,775,262 8,599,442

3,736,244 4,860,136 5,074,018

2,403,365 3,043,432 3,629,257

- - -

13,617 31,755 74,891

- - 12,0151,319,262 1,784,949 1,381,885

494,723 657,884 504,388

824,539 1,127,065 877,497

- - -

- - -

864,062 853,805 849,810

904,374 895,029 879,137857,960 850,499 853,997

- - -

0.953 1.32 1.03

0.91 1.26 1.00

- - -

0.09

- - -

110,000 140,000 166,000

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2/2/2002 2/1/2003 1/31/2004

Thousands Thousands Thousands

13,847,873 14,454,709 15,854,000

9,704,389 9,541,558 9,886,000

4,143,484 4,913,151 5,968,000

3,805,968 3,900,522 4,089,000

- - -

109,190 248,599 234,000

13,315 36,845 38,000241,641 800,875 1,683,000

249,405 323,418 653,000

(7,764) 477,457 1,030,000

- - -

- - -

860,255 875,546 892,555

860,255 881,478 988,178865,727 887,323 897,202

- - -

(0.01) 0.55 1

(0.01) 0.54 1.09

- - -

0.09 0.90

- - -

165,000 169,000 153,000

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1/29/2005

Thousands

16,267,000

9,886,000

6,381,000

4,296,000

(105,000)

167,000

59,0001,872,000

722,000

1,150,000

-

-

893,357

991,122860,559

-

1

1.21

-

0.09

-

152,000

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Exhibit 1 Gap Inc. Financial and Statistical Data

Fiscal Year 1993 1994 1995 1996Financial Results ($ in millions)Net sales 3,296 3,723 4,395 5,284COGS and occupancy expenses 1,997 2,202 2,646 3,094

Operating expenses 748 854 1,004 1,270Net interest expense 0.8 -11 -16 -19Net earnings (loss) 258 320 354 453Purchase of property and equipment 216 237 310 376Merchandise inventory 331 371 483 579Total assets 1,763 2,004 2,343 2,627Shareholders' equity 1,126 1,375 1,640 1,640

Financial RatiosGross margin (% of sales) 39.4% 40.9% 39.8% 41.4%Expense ratio (% of sales) 22.7% 22.9% 22.8% 24.0%Operating profit (% of sales) 16.7% 17.9% 17.0% 17.4%

Net income (% of sales) 7.8% 8.6% 8.1% 8.6%Stock turns per year (COGS/inventory) 6 6 5 5ROTA (net earnings/total assets) 14.6% 16.0% 15.1% 17.2%ROE (net earnings/shareholders' equity) 22.9% 23.3% 21.6% 27.4%Dividend payout (% of net earnings) 20.5% 20.3% 18.9% 18.5%

StatisticsNumber of new store locations opened 108 172 225 203Number of store locations closed 45 34 53 30

Number of store locations open at year end 1,370 1,508 1,680 1,854Square footage of store space at year-end (000) 7,546 9,166 11,100 12,645Average store size, square feet 5,508 6,078 6,607 6,820

Number of employees at year-end 44,000 55,000 60,000 66,000Comparable store sales increase (decrease) 1% 1% 0% 5%Sales per store ($000) 2,406 2,469 2,616 2,850Sales per employee, current $ (000) $75 $68 $73 $80Sales per square foot, current $ $437 $406 $396 $418

Sales per employee, real 2004 $ (000) $92 $81 $86 $92Sales per square foot, real 2004 $ $535 $487 $465 $482GDP deflator (2000 = 1.000) 0.884 0.903 0.921 0.939

Sources: GAP Inc., 1999 Annual Report, pp. 18, 19; and 2004 Annual Report, p. 20, www.gapinc.com, accessed

Analysis, www.bea.doc.gov, accessed June 2005.

a In its 1999 Annual Report, Gap Inc. started recording the number of store concepts (e.g., babyGaps, Gnumbers reflect store locations). Gap Inc. reverted back to recording store locations in 2003; the post-1

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1997 1998 1999 2000 2001 2002 2003 2004

6,508 9,054 11,635 13,673 13,848 14,455 15,854 16,2673,776 5,013 6,361 8,657 9,733 9,541 9,885 9,886

1,635 2,403 3,043 3,629 3,806 3,901 4,068 4,296-3 14 32 63 96 212 196 108

534 825 1,127 842 -25 478 1,031 1,150483 843 1,269 1,989 1,026 308 261 442733 1,056 1,462 1,904 1,769 2,048 1,704 1,814

3,338 3,964 5,189 7,387 8,096 10,283 10,713 10,0481,584 1,574 2,233 2,816 2,880 3,526 4,648 4,936

42.0% 44.6% 45.3% 36.7% 29.7% 34.0% 37.6% 39.2%25.1% 26.5% 26.2% 26.5% 27.5% 27.0% 25.7% 26.4%16.9% 18.1% 19.2% 10.1% 2.2% 7.0% 12.0% 12.8%

8.2% 9.1% 9.7% 6.2% -0.2% 3.3% 6.5% 7.1%5 5 4 5 6 5 6 516.0% 20.8% 21.7% 11.4% -0.3% 4.6% 9.6% 11.4%33.7% 52.4% 50.5% 29.9% -0.9% 13.6% 22.2% 23.3%15.0% 9.3% 6.7% 8.9% -304% 16.3% 7.7% 6.9%

298 356 570 434 324 115 35 13022 20 18 60 75 95 130 158

2,130 2,466 3,018a

2,848 3,097 3,117 3,022 2,99415,313 18,757 23,978 31,373 36,333 37,252 36,518 36,5917,189 7,606 7,945 11,106 11,732 11,951 12,084 12,221

81,000 111,000 140,000 166,000 165,000 169,000 153,000 152,0006% 17% 7% -5% -13% -3% 7% 0%

3,055 3,672 3,855 4,801 4,471 4,637 5,246 5,433$80 $82 $83 $82 $84 $86 $104 $107

$425 $483 $485 $436 $381 $388 $434 $445

$91 $92 $92 $89 $89 $89 $106 $107$482 $541 $536 $472 $403 $403 $443 $4450.954 0.965 0.979 1.000 1.024 1.041 1.060 1.082

pril 2005; GDP deflator nos. from U.S. Dept. of Commerce, Bureau of Economic

apKids, Gaps) separately even if housed in the same location (the pre-199999 numbers reflect total Gap Inc. store locations.

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Exhibit 2 The World's Top Retailers of Apparel

Total 2002 Sales Apparel SalesCompany (US$ billion) (US$ billion)

Wal-Mart 258.7 24.3

Gap Inc. 15.9 15.9Federated Department Stores 15.4 10.7TJX Cos. 13.3 9.9JC Penney 17.8 9.8Target 42.7 8.9May Department Stores 13.5 8.9Kmart 23.3 6.7Hennes & Mauritz (H&M) 6.0 6.0Sears 41.1 5.3

Karstadt Quelle 17.3 5.3Inditex 5.4 5.2Limited Brands 8.9 5.1

C&A 4.7 4.7Dillard's 7.6 4.7Next 3.3 3.3Fast Retailing 3.1 3.1Arcadia Group 2.9 2.9Burlington Coat Factory 2.9 2.7Charming Shoppes 2.4 2.4

Total 519.8 151.9

Source: Michael Flanagan, "How Retailers Source Apparel," Just-Style, January

2005, via Proquest/ABI Inform, www.proquest.com, accessed April 2005.

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Exhibit 3 Apparel Spending by Channel, 2003

Channel Examples Men's Wear Purchases

Department Stores Dillard's, Macy's 18.8%

National Chains JC Penney, Sears 15.7%Specialty Stores Gap, Abercrombie & Fitch 26.4%Off-Price Retailers Marshalls, Ross, TJ Maxx 9.3%Mass Merchants Kmart, Target, Wal-Mart 16.0%Factory Outlets 2.4%Catalogue/Internet 5.8%

Sources: Scott Malone, "Squeezed Consumers Spending Less on Apparel," Women's Wear Daily, August 25, 2004; an

"Men's Wear in a Malaise in '03," DNR, March 29, 2004; via Proquest/ABI Inform, www.proquest.com, accessed June 2

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Women's Apparel Spend

20.9%

12.9%32.3%8.8%14.0%1.2%6.5%

d Ira P. Schneiderman,

05.

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Exhibit 4 Top Specialty Apparel Retailers in the U.S. in 2004

Rank Company

1. Gap Inc.

2. Limited Brands, Inc.a

3. Charming Shoppes, Inc.4. Abercrombie & Fitch Co.

5. American Eagle Outfitters, Inc.6. Ann Taylor Stores Corp.7. The Talbots, Inc.8. Claire's Stores, Inc.9. Goody's Family Clothing, Inc.10. Pacific Sunwear of California, Inc.11. New York & Company, Inc.12. Chico's FAS, Inc.

13. Aeropostale, Inc.14. Urban Outfitters, Inc.15. The Cato Corp.16. Too, Inc.17. Hot Topic, Inc.18. Coldwater Creek, Inc.19. Guess?, Inc.20. Wilsons The Leather Experts, Inc.21. All other public and private specialty retailers

Sources: Cecily Hall and Meredith Derby, "The WWD List: Leaders o

Proquest/ABI Inform, www.proquest.com, accessed June 2005; Limite

June 2005; company Web sites.

aLimited Brands, Inc.'s revenue was $9.41 billion in 2004. Sales of clo

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Sales, ChangeBrands/Concepts $ millions over 2003

Gap, Banana Republic, Old Navy, Forth & Towne $16,270 2.6%

Victoria's Secret, Express, Bath & Body Works, The Limited, The $6,720 5.3%White Barn Candle Co., Henri BendelLane Bryant, Fashion Bug, Catherines $2,330 2.0%Abercrombie & Fitch, Hollister Co., RUEHL $2,020 18.4%

American Eagle Outfitters $1,880 31.1%Ann Taylor, Ann Taylor LOFT $1,850 16.7%Talbots $1,700 6.5%Claire's, Icing by Claire's $1,280 -12.9%Goody's $1,270 3.3%PacSun, d.e.m.o $1,230 18.1%New York & Company $1,040 8.1%Chico's, White House/Black Market, soma by Chico's $1,010 38.8%

Aeropostale $964.2 31.2%Urban Outfitters, Anthropologie, Free People $827.8 50.9%Cato, It's Fashion! $773.8 5.7%Limited Too, Justice $675.8 12.9%Hot Topic, Torrid $656.5 14.8%Coldwater Creek $590.3 13.8%Guess? $518.9 15.9%Wilsons Leather $441.1 -15.3%

$7.8

f the Pack; Top 20 Publicly Traded Specialty Retailers Ranked by Annual Volume," Women's Wear Daily, May 12, 2

d Brands, Inc., 2004 Annual Report (Columbus, Limited Brands, Inc., 2005), p. 26, www.limitedbrands.com, accesse

thes and intimate apparel accounted for approximately 70% of total sales, bath and beauty products, the remainder.

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SpecialtyMarket Share

31.4%

13.0%

4.5%3.9%

3.6%3.6%3.3%2.5%2.4%2.4%2.0%1.9%

1.9%1.6%1.5%1.3%1.3%1.1%1.0%0.8%

15.0%

005 via

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Exhibit 5 Top U.S. Public Apparel Companies by 2003 Profit Margin

2003 Profit 2003 NetMargin (Net Income 2003 Sales

No. Company Income/Sales) ($ mil.) ($ mil.)

1. Chico's FAS, Inc. 13.0 100.2 768.52. Abercrombie & Fitch Co. 12.0 205.1 1,707.83. Christopher & Banks Corp. 10.1 39.3 390.74. Urban Outfitters 8.8 48.4 548.45. Limited Brands, Inc. 8.0 717.0 8,934.06. Pacific Sunwear of California, Inc. 7.7 80.2 1,040.37. VC Corp. 7.6 397.9 5,207.58. Jones Apparel Group 7.5 328.6 4,375.39. Aeropostale 7.4 54.3 734.9

10. Liz Claiborne, Inc. 6.6 279.7 4,241.111. Gap Inc. 6.5 1,030.0 15,854.012. Polo Ralph Lauren 6.5 171.0 2,649.7

13. The Talbots, Inc. 6.4 104.7 1,624.314. Ann Taylor Stores Corp. 6.4 100.9 1,587.715. Quiksilver, Inc. 6.0 58.5 975.016. Bebe Stores, Inc. 6.0 19.3 323.517. Jos. A. Bank 5.5 16.6 299.718. Cache, Inc. 5.1 11.1 216.319. Delta Apparel, Inc. 4.7 6.1 129.520. Gymboree Corp. 4.4 25.7 578.0

Source: Michael D. Cole, "Facing a Brave New World," Apparel 45 (July 2004), p. 22.

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2002 Net % Change in % Change in2002 Profit Income 2002 Sales Profit Margin Sales

Margin ($ mil.) ($ mil.) 2002/2003 2002/2003

12.6 66.8 531.1 3.7 44.712.2 194.9 1,595.8 1.7 7.011.9 32.9 275.9 15.6 41.66.5 27.4 422.8 36.2 29.75.9 502.0 8,455.0 35.0 5.85.9 49.7 846.4 31.3 22.9-3.0 -154.5 5,083.5 351.4 2.47.7 332.3 4,312.2 -2.5 1.55.7 31.3 550.9 30.0 33.4

6.2 231.2 3,717.5 6.0 14.13.3 477.5 14,454.7 96.7 9.77.3 172.5 2,363.7 -11.6 12.1

7.6 120.8 1,595.3 -14.9 1.85.8 80.2 1,381.0 9.4 15.05.4 38.0 705.5 11.4 38.28.4 26.5 316.4 -28.8 2.22.4 5.8 243.4 132.4 23.14.5 8.9 199.4 15.0 8.54.9 6.5 131.6 -4.6 -1.64.0 21.8 546.8 11.5 5.7

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Exhibit 6 Gap, Banana Republic, and Old Navy Sales and Stores, 2004

Gap, North America Gap, International Banana Republic

Net sales ($ million)

Stores 5,510 1,494 2,178Online 236 NA 91Total $5,746 $1,494 $2,269Change from 2003 -0.5% -2.2% 8.6%

No. of units 1,396 247 462Square feet (in millions) 13.0 2.4 3.9Average store size, square feet 9,312 9,717 8,442

Source: Gap Inc., 2004 Annual Report, pp. 24-25, www.gapinc.com, accessed April 2005.

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Old Navy

6,511236

$6,7474.5%

88917.3

19,460

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Exhibit 7 Gap Inc. and Competitor Data, 2004

Abercrombie Ann TaylorGap Inc. & Fitch Co. Stores

Financial Results ($ in millions)

Net sales 16,267 2,021 1,854COGS 9,886 1,038 820Operating expenses 4,296 562 843Net earnings 1,150 216 63Cash dividends paid 79 46 0Capital expenditures 442 185 153Merchandise inventory 1,814 211 229Total assets 10,048 1,348 1,327Shareholders' equity 4,936 669 927

Financial RatiosGross margin (% of sales) 39.2% 48.6% 55.8%

Expense ratio (% of sales) 26.4% 27.8% 45.5%Operating profit (% of sales) 12.8% 20.8% 10.3%Net income (% of sales) 7.1% 10.7% 3.4%Stock turns per year (COGS/inventory) 5 5 4ROTA (net earnings/total assets) 11.4% 16.0% 4.7%ROE (net earnings/shareholders' equity) 23.3% 32.3% 6.8%Dividend payout (% of net earnings) 6.9% 21.3% 0.0%

StatisticsEmployees at year end 152,000 62,140 14,900Sales per employee ($000) 107 33 124Shares outstanding (millions) 861 86 711-year sales growth 2.6% 18.4% 16.7%

1-year net income growth 11.7% 5.5% -37.3%

Market capitalization as of June 27, 2005($ in millions) 17,636 5,825 1,793

Sources: Gap Inc., 2004 Annual Report, p. 20, www.gapinc.com, accessed April 2005; Hoover's Inc., www.hoover

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InditexChico's FAS H&M (2003 data)

1,067 8,001 5,708408 3,424 2,974398 2,988 1,944141 1,084 557

0 740 ---94 235 ---73 766 604

716 4,191 4,357561 3,309 2,614

61.8% 57.2% 47.9%

37.3% 37.3% 34.1%24.5% 19.9% 13.8%13.2% 13.5% 9.8%

6 4 519.7% 25.9% 12.8%25.1% 32.8% 21.3%0.0% 68.3% ---

8,800 31,701 39,760121 252 144179 --- ---

38.8% 24.9% 32.8%

40.9% 27.8% 17.0%

5,910 --- ---

's.com, accessed June 2005.