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Sat, Aug 23, 2003 - Page 12 News List

World Business Quick Take

Clothing

Gap's profits triple

Gap Inc, the largest US clothing chain, said second-quarter profit more than tripled, led by a rebound in sales at the retailer's Old Navy and Gap stores. Net income surged to US$209.3 million, or US$0.22 a share, from US$56.8 million a year earlier, the San Francisco-based company said in a statement. Revenue in the three months ended Aug. 2 rose 13 percent to US$3.69 billion. Gap is selling more clothes at full price since its return to basic styles, such as jeans and casual button-down shirts, after fashion misfires. Old Navy, which featured actress Morgan Fairchild in television commercials with a "Love Boat" theme, lead the company's rebound with an 11 percent increase in same-store sales. During the last week of the quarter the Gap brand began running commercials featuring singers Madonna and Missy Elliot wearing corduroy jeans.

Brokerage firms

Salomon fined US$1 million

Citigroup Inc's Salomon Smith Barney brokerage unit was fined US$1 million by the New York Stock Exchange and one of its managers censured over supervisory issues concerning WorldCom Inc, the Wall Street Journal reported, without saying where it obtained the information. The penalties, which haven't been formally announced, were imposed for poor supervision of brokers advising WorldCom employees, who often borrowed large sums of money to cover taxes on their stock holdings, now almost worthless, the paper said. In the 1990s, Salomon Smith Barney and other brokerage firms targeted employees of big companies who had the chance to buy stock, the Journal said.

Finance

Asia learning to outsource

Finance and accounting jobs in developed countries could face increased pressure as more companies get ready to outsource these functions, with the Asia-Pacific region fast catching on to the trend, a study said yesterday. Seventy percent of respondents to an Accenture and Economist Intelligence Unit (EIU) poll expect finance outsourcing to become more prevalent in the next three years. Senior executives from 236 companies globally, including 60 in the Asia-Pacific were queried. The results, published in The Business Times, found 30 percent already outsourcing these functions and 85 percent of them are happy with the results. Only 7 percent said outsourcing has not been successful.

Macroeconomics

S Korea's GDP grows 1.9%

South Korea's economy grew just 1.9 percent in the second quarter, the lowest level in nearly five years, the central Bank of Korea reported on yesterday. The increase in the country's GDP from April through June was the lowest since late 1998, when South Korea slipped into recession as a result of the Asian financial crisis. The Bank of Korea reported 3.7 percent growth in the first quarter of the year. Bank officials attributed the drop to weak investment in businesses and poor consumption triggered by widespread consumer debt. They also cited sluggish exports related to a downturn in the world economy, as well as problems stemming from the SARS outbreak in Asia. Last April, bank officials revised downward their overall economic growth forecast for this year from 5.7 percent to 4.1 percent, while predicting a light recovery of the whole economy.

Agencies

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