In response to media reports issued today, Gap Inc. (NYSE:GPS) issued a statement clarifying information surrounding a UK media report on the use of child labor in an unauthorized facility that produced a single product for Gap.

Earlier this week, the company was informed about an allegation of child labor at a facility in India that was working on one product for GapKids. An investigation was immediately launched. The company noted that a very small portion of a particular order placed with one of its vendors was apparently subcontracted to an unauthorized subcontractor without the company’s knowledge or approval. This is in direct violation of the company’s agreement with the vendor under its Code of Vendor Conduct.

Marka Hansen, president of Gap North America, made the following statement today:

“We strictly prohibit the use of child labor. This is a non-negotiable for us – and we are deeply concerned and upset by this allegation. As we’ve demonstrated in the past, Gap has a history of addressing challenges like this head-on, and our approach to this situation will be no exception.

“In 2006, Gap Inc. ceased business with 23 factories due to code violations. We have 90 people located around the world whose job is to ensure compliance with our Code of Vendor Conduct.

“As soon as we were alerted to this situation, we stopped the work order and prevented the product from being sold in stores. While violations of our strict prohibition on child labor in factories that produce product for the company are extremely rare, we have called an urgent meeting with our suppliers in the region to reinforce our policies.

“Gap Inc. has one of the industry’s most comprehensive programs in place to fight for workers’ rights overseas. We will continue to work with the government, NGOs, trade unions, and other stakeholder organizations in an effort to end the use of child labor.”

For more information on Gap Inc.’s social responsibility efforts, including detailed information on its ethical sourcing program, please see gapinc.com.

About Gap Inc.

Gap Inc. is a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy and Piperlime brand names. Fiscal 2006 sales were USD 15.9 billion. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Asia and the Middle East.

Contacts

Gap Inc.
Media Contacts:
Bill Chandler, 415-427-8689
Cell: 415-385-1244
Cynthia Lin, 415-427-3622
Cell: 415-385-7236

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