Store Operations - The company ended fiscal 2020 with 3,100 company-operated stores and 615 franchise store locations[29]. - The company has franchise agreements with unaffiliated franchisees to operate stores in various countries across Asia, Europe, Latin America, the Middle East, and Africa[38]. Workforce - The company had a workforce of approximately 117,000 employees as of January 30, 2021, with 80% located in the U.S.[41]. Inventory Management - The company maintains a significant amount of inventory, especially prior to the peak holiday selling season, and is managing excess inventory due to COVID-19 related store closures[39]. Competition - The company competes in a highly competitive global apparel retail industry[40]. Sustainability and Innovation - The company is committed to sustainability efforts and product innovation to enhance quality and support sustainability[32]. Vendor Relationships - The company’s two largest vendors accounted for about 7% each of total fiscal 2020 purchases[34]. Customer Insights - The company leverages customer feedback and purchasing data to guide product and merchandising decisions[32]. Financial Performance - Interest income earned from investments was $10 million in fiscal 2020, down from $30 million in fiscal 2019[229]. - The company completed the issuance of Notes in May 2020, receiving gross proceeds of $2.25 billion, with scheduled maturities ranging from $500 million to $1 billion at interest rates between 8.375% and 8.875%[224]. Currency Risk - A hypothetical 10% adverse change in foreign currency exchange rates would negatively impact underlying cash flow by $41 million as of January 30, 2021[221]. - The company has a sensitivity analysis model that measures the impact of foreign currency exchange rates on cash flow, indicating significant exposure[221]. Credit Ratings - Moody's downgraded the company's senior unsecured rating from Baa2 to Ba1, and Standard & Poor's downgraded its credit ratings from BB to BB- with a negative outlook[225]. Investments - As of January 30, 2021, the company held $410 million in available-for-sale debt securities with original maturities greater than three months and less than two years[228]. - The company has highly liquid investments classified as cash and cash equivalents, primarily in time deposits, money market funds, and commercial paper[227]. - Changes in interest rates impact the fair value of investments classified as available-for-sale[228]. - Unrealized gains or losses on available-for-sale debt securities were immaterial as of January 30, 2021[228]. - The company’s cash equivalents and short-term investments are valued at original purchase prices plus accrued interest[227].
The Gap, Inc.(GAP) - 2021 Q4 - Annual Report