Gap’s thirdquarter net sales rose 2.5 per cent.

The brand’s formal clothing and dresses are having a steady demand from affluent consumers. People are preferring more formal clothing, dresses, woven tops and pants, shelving casual wear like T-shirts and shorts as they return to travel, work and social occasions after two years of pandemic-induced restrictions.Gap's Banana Republic, an affordable luxury brand, posted an eight per cent rise in sales, while its Old Navy brand that has been struggling with out-of-fashion clothes reported a two per cent increase.It expects fourth-quarter net sales to be down in mid-single digits. Gap saw strong volume in October slow a bit in the end and a little bit of a slow start to November.

Gap is expected to continue to struggle over the next 12 months because of its low- to middle-income consumer base and underperforming brands. Heading into the holiday season and 2023, discounts could continue for brands like Gap due to a weaker consumer. Soaring prices of essential commodities have damped lower-income consumer spending on non-essentials like apparel. In October, Gap removed products from its Yeezy Gap line created in partnership with Kanye West, and shut down YeezyGap.com following the rapper's anti-Semitic comments.