Gap (GPS)

Updates or changes to our IT systems may disrupt operations.

We continue to evaluate and implement upgrades to our IT systems. Upgrades involve replacing existing systems with successor systems, making changes to existing systems or cost-effectively acquiring new systems with new functionality. We are aware of inherent risks associated with replacing these systems, including accurately capturing data and system disruptions, and believe we are taking appropriate action to mitigate the risks through testing, training, and staging implementation as well as ensuring appropriate commercial contracts with third-party vendors supplying such replacement technologies are in place. Although we are on track with the replacement or upgrade of our systems, there can be no assurances that we will successfully launch these systems as planned or that they will occur without disruptions to our operations. IT system disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our results of operations.

Updates or changes to our IT systems may disrupt operations.

We continue to evaluate and implement upgrades to our information technology systems. Upgrades involve replacing existing systems with successor systems, making changes to existing systems or cost-effectively acquiring new systems with new functionality. We are aware of inherent risks associated with replacing these systems, including accurately capturing data and system disruptions, and believe we are taking appropriate action to mitigate the risks through testing, training and staging implementation as well as ensuring appropriate commercial contracts with third-party vendors supplying such replacement technologies are in place. For example, in fiscal 2007, we implemented the first phase of our new merchandise planning system. The new merchandise planning system will be rolled out to our domestic operations in fiscal 2008 and 2009. Although we are on track with replacement or upgrade of our systems, there can be no assurances that we will successfully launch these systems as planned or that they will occur without disruptions to operations. Information technology system disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our results of operations.

Updates or changes to our IT systems may disrupt operations.

SIZE="2">We continue to evaluate and implement upgrades to our information technology systems. Upgrades involve replacing existing systems with successor systems, making changes to existing systems or cost-effectively acquiring new systems with new
functionality. We are aware of inherent risks associated with replacing these systems, including accurately capturing data and system disruptions, and believe we are taking appropriate action to mitigate the risks through testing, training and
staging implementation as well as ensuring appropriate commercial contracts with third-party vendors supplying such replacement technologies are in place. For example, in fiscal 2007, we implemented the first phase of our new merchandise planning
system. The new merchandise planning system will be rolled out to our domestic operations in fiscal 2008 and 2009. Although we are on track with replacement or upgrade of our systems, there can be no assurances that we will successfully launch these
systems as planned or that they will occur without disruptions to operations. Information technology system disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our results of operations.