Business

Surging Production Costs Hurt Gap Profits

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The country's largest clothing chain came out with a gloomy warning Thursday. Gap slashed its yearly profit forecast by more than 22 percent and its shares tumbled. Gap's profits are being hit by surging production costs. Cotton prices have been rising and so have wages for workers in China, and other parts of Asia, where Gap manufactures its clothing.

RENEE MONTAGNE, host:

NPR's business news starts with rising prices hitting the Gap.

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MONTAGNE: The country's largest clothing chain came out with a gloomy warning yesterday. Gap slashed its yearly profit forecast by more than 22 percent, and its shares tumbled. Gap's profits are being hit by surging production costs. Cotton prices have been rising, and so have wages for workers in China and other parts of Asia, where Gap manufactures its clothing.

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