Welcome to Gap Inc.'s 34th Annual Meeting of Shareholders. I'm Glenn Murphy , Chairman and CEO, and this is the fourth year I've had the privilege of presiding over this meeting. Joining on the stage this morning, as they faithfully have done since 2008, are Sabrina Simmons, Executive Vice President, Chief Financial Officer; Michelle Banks, Executive Vice President, Corporate Secretary, and General Counsel. Seated in the front row to my right are our Board of Directors. I want to welcome each one of them. I'm going to introduce one at a time, so I know the temptation is to go into rousing applause, but let me just get through each one of them calmly. Bobby Martin is here. He's our Lead Director and Chairman of our Governance Committee. Adrian Bellamy, Chairman of our Compensation Committee. Mayo Shattuck, Chairman of our Audit Committee. I should pause right here.
Doris Fisher is not with us today. She's our only honorary lifetime director. Most importantly, Doris is our founder. She's not with us today, but who is with us today is Bob Fisher and his younger brother, Bill Fisher. The rest of the board is composed of Domenico De Sole, Kneeland Youngblood, Jorge Montoya, and our brand new member, first annual meeting, is Katherine Tsang . Our senior management team is here this morning, and they're available to shareholders after the meeting. If you have any questions that you want to get answered, they'll all be here hanging by the front and happy to answer any questions. The agenda for today is Michelle will come up in a minute and take you through the formal proceedings of the meeting, followed by Sabrina, who will present the 2010 financial report to shareholders.
I'm going to come back up and take you through a business update from 2010 and foreshadow the company's strategic initiatives for 2011. We'll take any questions from shareholders. Without any further ado, Michelle, over to you.
Thank you, Glenn, for calling the Annual Meeting of Shareholders of Gap Inc. to order. Good morning and welcome, everyone. I'd like to first ask all of you to please turn off any cell phones, pagers, or other electronic devices. Today's meeting is also being webcast. The webcast will be recorded and available on gapinc.com immediately following this meeting. Those participating by webcast will be in listen-only mode. Those attending in person can find the rules of the meeting at the bottom of the distributed agenda. We're holding this meeting pursuant to notice mailed to all shareholders of record as of March 21st, 2011. After the formal portion of the meeting, Sabrina Simmons, our Chief Financial Officer, will discuss company performance. She'll then turn the meeting back over to Glenn. After we hear from Glenn, we'll answer questions from our shareholders.
John Scheffler of Deloitte & Touche , our independent registered public accounting firm, is also here with us this morning and is available to respond to any questions from shareholders. Please note, only shareholders may ask questions at this morning's meeting. We will now vote on the five proposals outlined in the proxy materials. The five items on the agenda are: one, the election as directors of the 10 nominees named in our proxy statement; two, the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm; three, the amendment and restatement of the 2006 long-term incentive plan; four, an advisory vote on the overall compensation of the company's named executive officers; five, an advisory vote on the frequency for an advisory vote on the overall compensation of the company's named executive officers.
We have executed affidavits of mailing of notice of the Annual Meeting of Shareholders of Gap Inc. This states that notice of the meeting has been mailed as requested and outlined in our bylaws. The affidavits will be filed with the minutes of this morning's meeting. Barb Novak of Wells Fargo Shareowner Services, our transfer agent, is here today and is acting as Inspector of Elections for today's meeting. Barb tells me that a count of the shares represented by proxy shows that we have a quorum to conduct business this morning. Before we vote on the five proposals, are there any shareholders who would like to vote in person by ballot or who would like to turn in a ballot or change their vote this morning? If so, please raise your hand and someone in the audience will assist you.
If you have already voted, including online, you do not need to vote by ballot. Would anyone like a ballot? Okay. Seeing no hands, we will now proceed with the five items of business before the meeting. The first proposal is the election as directors of the 10 nominees named in the proxy statement. The second proposal is the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending January 28, 2012. The third proposal is the approval of the amendment and restatement of our 2006 long-term incentive plan. The fourth proposal is the approval on an advisory basis of the overall compensation of the company's named executive officers. The fifth proposal is the approval on an advisory basis of the frequency for an advisory vote on the overall compensation of the company's named executive officers.
The polls for the five proposals before the meeting are now open. Again, if you would like to vote by ballot, please raise your hand now. The polls for each proposal before the meeting are now closed. Barb, can you give me your preliminary report? The 10 nominees for director listed in the proxy statement have been elected. The selection of Deloitte & Touche as the company's independent registered public accounting firm has been ratified. The amendment and restatement of the company's 2006 long-term incentive plan has been approved. The overall compensation of the company's named executive officers has been approved. The shareholders have voted to recommend that an advisory vote on the overall compensation of the company's named executive officers occurs every year. The final report of the Inspector of Elections will be filed with the minutes of this morning's meeting.
This concludes the formal portion of our meeting today. The Annual Shareholders Meeting is now adjourned. In a moment, we will hear from Sabrina and Glenn, and then we will answer questions from our shareholders. Before I hand the meeting back over to Sabrina, I want to take this opportunity to address some administrative matters. The information in the remaining portion of today's meeting may contain forward-looking statements. There are important factors that could cause our actual results to differ from those forward-looking statements. Information regarding factors that could cause results to differ can be found in our annual report on Form 10-K for the fiscal year ended January 29th, 2011, as well as our May 10th, 2011, press release announcing our webcast, both of which are available on gapinc.com. The information in today's presentation also includes a non-GAAP measure, free cash flow.
Under SEC Regulation G, we are required to reconcile with GAAP. The reconciliation of this measure to a Gap financial measure is available on gapinc.com under financial news and events. As a reminder for shareholders attending the meeting in person, shareholder questions will be answered after Glenn's presentation. Sabrina, I turn it over to you.
Good morning, everyone. As I do every year, I'll begin today by reviewing how we performed against our 2010 financial priorities and then talk about our goals for 2011. In 2010, we laid out four priorities. First, grow top line while continuing to deliver earnings growth. Second, make prudent investments for our future growth. Third, maintain our discipline on expenses. Fourth, return excess cash to shareholders. I'm very pleased that we delivered on all of our stated objectives in 2010. Here are the results. First, net sales grew 3% or nearly $500 million s. Net earnings were up 9% to $1.2 billion. Second, we successfully launched wholly owned stores in China and Italy. We also continued to grow our global online business through new websites serving Canada, Europe, and China, and we now have the ability to ship to over 90 countries.
Third, even while we made those investments, rent and occupancy expenses leveraged 60 basis points and operating expenses leveraged 80 basis points. Fourth, we generated nearly $1.2 billion in free cash flow, and we distributed $2.2 billion of cash to shareholders through repurchases and dividends. This economic model that we drove in 2010 resulted in operating margins that grew 60 basis points to 13.4%, our fourth consecutive year of operating margin expansion, and our highest margin rate since 1999. Likewise, we delivered earnings per share growth of 19% to $1.88, which is our fourth consecutive year of double-digit earnings per share growth. Let me now turn to 2011 financial priorities, which largely remain unchanged from last year. Our first priority in 2011 is growing the top line.
Similar to 2010, we'll focus on revenue growth through a combination of our existing stores and our global growth initiatives, including online, Italy, China, and our franchises. Our second goal is to maintain discipline on expenses. Our largest expense is our cost of goods sold, which will escalate sharply this year as a result of cotton price inflation. To offset this, we expect to increase our average unit retail. However, we anticipate that increases in retails will not fully offset increased product costs, and unfortunately, this will put significant pressure on our margins in 2011. We do view these unprecedented spikes in cost of goods as temporary. In terms of rent and occupancy and operating expenses, we remain confident that if we deliver total sales growth, we will leverage these expenses on a full-year basis.
Third, in keeping with our philosophy of balancing short-term results with long-term growth opportunities, in 2011, we plan to invest in global expansion, continue the rollout of our Old Navy store remodels, as well as begin the rollout of Athleta stores in North America. Our fourth goal is to return cash to shareholders. As evidence of our commitment since 2004, we've returned over $10 billion through share repurchases and dividends, which represents well over 100% of the free cash flow we generated over the same period. In February, we announced an additional $2 billion share repurchase program, and we also increased our annual dividend by 13% to $0.45 per share. Over the past decade, we've demonstrated our ability to generate consistent and strong free cash flow, even through a major recession.
Over the past several years, we've had minimal to no debt on our balance sheet, but recently, three factors came together to make this the right time to raise a modest amount of debt. First, our track record of consistent cash flow generation. Second, the assignment of investment-grade ratings from Moody's and Fitch. Finally, very attractive interest rates. Given these factors, in early April, we issued $1.65 billion in debt, which should result in lowering our weighted average cost of capital. We view this as an opportunistic adjustment to our capital structure. Our financial framework remains unchanged, given the value we place on maintaining a strong credit profile. In conclusion, we're proud that we've consistently demonstrated our commitment to shareholders by delivering on all of our goals over the last four years, and we feel confident that our long-term strategies will continue to deliver value going forward.
Thank you, and I'll turn it over to Glenn.
Thank you, Sabrina. In the time we have left, I thought I'd take, as I mentioned earlier, our shareholders through our 2010 strategic accomplishments and how that set us up for further activity and further investment in 2011 and beyond. I'm assuming everybody here got a copy of our annual report, and what you saw this year on the cover is we started to highlight the people that were making the investments around the globe that the business had not made previously. We had outposts in London and in Tokyo, but really hadn't made the kind of investments in moving our business to certain parts of the world that we felt had true potential for Gap Inc. In the last 12 months, as the report highlights, we opened up in Milan. We opened up in Shanghai.
Twenty-four months ago, we opened up in Moscow, complementing very strong, steady strategies we have today in New York and in London. Our view, as we look at the potential of the business, is one of the goals the company has is to be sharing American style around the world. From Gap to Banana Republic to Old Navy, taking these very strong American brands and taking them globally and sharing that American style to customers around the world. Let me just take you through how that plays itself out on a chart that I've shown to the shareholders every single year. This is how our business splits between our North American bricks-and-mortar business and our two significant growth opportunities in online and international. In 2010, at the end of last year's fiscal, 22% of our business was done in international and online.
Right now, as we look at the plans we have in place, the structure we've put in place, the investments that we're making, and the potential of our brands around the world, we see that number becoming, at a minimum, 30% by 2013. That's a big shift for the company. This is maintaining moderate, steady growth in North America while making these investments in online and global. When you add the store component to this, I think it's an intriguing number for shareholders to look at. In 2006, we had almost 2,900 stores in North America. Right now, we're projected in 2013 to have 2,500 stores, and our international business goes up to 550 stores. That does not include our franchise business, which will have, at the end of this year, about 275 stores and greater potential beyond that.
It is a fairly large strategic shift for the company while still maintaining both of these two initiatives going forward. If we project forward, an important number for shareholders to look at is how does this play out on sales? If you look at the performance of the company in 2008, 2009, 2008 and 2009, during the recession, this company negative comped. These two lines on this chart show you the delta difference between our comp performance, highlighting 2010 by quarter, and what do our total sales look like? Everybody gets fixated on comp. I understand that in a lot of people's eyes, that's a measurement of the health of a business. What we're looking at is what's the difference between our total sales and our comp store sales.
You see that spread widening as you look into Q3 of 2010 and Q4 of 2010 to the point at the end of the quarter of last year's fiscal. That difference was 3 full points. You'll hear this a number of times: moderate, steady growth in North America, and then make the investments internationally, make them online, and drive total sales growth in the business. Let's talk about North America for a second. There are a number of initiatives going on, but in the interest of time, let me take you through four key areas we're looking at in our North American business. First one is we need to continue to evolve our fleet. At the end of last year, we had 250 Old Navy stores remodeled, repositioned. This is a picture of our Emeryville store just on the other side of the bay.
Put the investment in it because when we look at all of our stores, but particularly Old Navy, the environment is critical. Tom Wyatt is here today getting the environment for that customer, so it's exciting. It's different than our other competitors. It's an investment we've made. We'll do another 100 stores in 2011. The second part of that from the evolution is since 2007, our square footage on existing stores is down 8%. There are some closures in there, as I highlighted earlier, but a big part of this is the consolidation, bringing Gap Adult and Gap Body together. Looking at our store fleet and our profile of our stores back four years ago, in a lot of cases, they were just too big.
Getting that square footage down, taking that cost off the balance sheet, making the capital investment to create the right environment now, that investment inside the right size store for our customers. Lastly, we've got to find the better balance. We've been working on this between our specialty branded channel and our value channel. In 2007, that ratio was for every six stores we had that were specialty branded, we had one value store. Last year, that was four to one, and our projections going forward, that number will get to three to one. Really building these holistic brands, a combination of the specialty business and the value business. Second thing in North America, we're looking at pipeline. I see Jen Gosling's here today, making the investment in this only business we have strictly online. It's the only business we have that's horizontal. It's unique.
We started off with shoes and went to handbags and added jewelry, and last year made the big investment to put in apparel, a broad range of apparel. Inclusive brands, brands that people know. At the same time, as Jen knows, to make this business strong, you got to keep adding national brands. In 2010, we added Michael Kors, Vera Wang, Stuart Weitzman. You got to keep adding the brands to Piperlime to make it a site people want to go to and make it more broad, more CCs. Lastly, it needs a lot of marketing. We're developing a brand in Piperlime, whether it's a pop-up store or other partnerships.
As far as I'm concerned, the strategy of taking social and commercial and where they meet on this site, that's why we have Rachel Zoe as one of our stylists who comes on and gives strong recommendations to those loyal customers who are on the Piperlime. In 2010, this was the stepping up of Piperlime. We got to continue to make those investments in the future. The other newer member of the family is Athleta. We opened up our first flagship store in San Francisco in January 2010. We will do nine more stores this year: New York, L.A., Washington. When we made the acquisition back two and a half years ago, we didn't see the future with stores, but our customers demanded it. As you know, we do what customers ask. They demanded stores.
They wanted the interaction, and we made those investments in Athleta to make sure we have not only these 10 stores, but what's the plan for the future? A big part of Athleta is how to make the experience between catalog, online, and stores absolutely seamless. There's a lot of lessons we're going to learn by Athleta. The great thing about having this white space and learning from it and bringing that back to our core business is the customer's absolute experience with the brand is seamless from all three of those different areas they can participate in Athleta. Lastly, what we really love about Athleta is its unbelievable customer affinity. We rarely have seen anything like this. People love this brand.
We're going to continue through our connection in the community, through investments, through the people we have in our stores, through the customer service we supply online to build that strength and build that affinity. Lastly, in North America, we got to deliver more consistent performance. People in the room today working on North American business understand this. We have to be more of a consistent performer, quarter in, quarter out. We've had moments, no question. We've had moments over the last four years, but they haven't been consistent enough as far as I'm concerned and the senior management team, and we're taking a lot of steps. This is just a small example today of the number of steps we're taking to make sure we get to that consistent performance. We need new categories in the business.
We need new customers, and we're changing the pipeline in our North American business to be a lot faster and a lot quicker to the consumers. We make better decisions. Better decisions in design, better decisions in merchandising, better decisions in inventory management. Those are only three areas that the North American leaders, that's Tom Wyatt, Art Peck, Jack Calhoun, are focusing on to get to that goal: moderate, steady growth in our North American business. Let me now just switch gears to global. Obviously, as Sabrina mentioned, we entered China last year. That was a huge investment for the business in time and focus. We'd not opened a corporate office in 15 years. We now have a 65-person operation in Shanghai, which is critical to the future. Second biggest apparel market in the world.
We opened four Gap stores in the fall of last year, just opened our fifth store in Beijing two weeks ago. This is a little shot of our campaign using Usher, a personal friend of the company's, and a shot of our store in Shanghai called Hong Kong Plaza. Bringing the brand to China was critical for us, and we're looking at to do at least another 10 stores in 2011 and then take it to the next level in 2012 and beyond. We also entered Italy. We entered the fashion capital of the world in Milan, fourth biggest apparel market in the world, and opened up this time both Banana Republic and Gap stores. These two stores independently are top five stores in each one of those brands around the world. We'll do eight more stores in Italy this year.
Feel very good about the prospects, and I'll talk later on strategically, how do we go into a new country like Italy and win? Third, I want to look at our global expansions, continuing the franchise business. We clearly see a path right now to 400 stores by 2014, maybe sooner, in our franchise business. In those 23 countries we have today, we are only at capacity in four. That means there's 19 other countries where we still have a lot more square footage, a lot more stores to be added. This is the early stages of that runway, and there's a lot of countries we're not in yet. Felt good about the addition.
There's an image of the opening in Melbourne about the countries we added in 2010 and the list for 2011 with very much a focus in Southeast Asia, where there's a lot of natural growth, is a key part of the company's franchise strategy. Global outlet. As we've talked before at other meetings, the company's strategy to win is to go in with our specialty brand, complemented by online and supported by the outlet channel, the value channel. That is a winning formula. We were not in Canada two years ago, we are now. We've doubled our stores in the U.K. We've quadrupled our stores in Japan. We will be going in with our outlet business into Italy in 2011 and into China in 2012. Diverse the beachhead with the brand, bring in the value business, and open online day one is a key winning strategy for Gap Inc.
Lastly, as I referenced, our online business. As I was here this time last year, we were shipping to one country online, the United States. We now ship to 90 countries around the world, 60 of those through a third-party licensing agreement, but the rest of them, we opened up dedicated sites. Dedicated sites in Canada, a dedicated site in London ships to 22 countries, and we opened up with a site we control in China day one when our stores opened in November. If you look at that lineup from an investment, from a growth perspective in 2010, it was a big year for the corporation. As we look forward, what are the key things and key takeaways a shareholder should have? We have a very strong economic model. Sabrina touched on a little bit when she was going through her presentation.
In 2007, the operating margin in this business was 7.6%. The operating margin in this business last year was 13.4%. Yes, we're going to have unfortunate situations like 2011 where our inflationary input costs spike at a very dramatic level. We have a flexible economic model. We will do everything we can, as we've proven in the past, to maximize earnings in the business. At the end of the day, the economic model is very strong, and as you go back to that sales chart I was showing, as we start to get total sales up by pushing our new initiatives, getting global and online, as you get more top-line sales through this lean new economic model, the earnings potential for the business long-term is very solid.
We are making the necessary changes in North America, whether that's structural changes, whether that's people changes, whether that's change in culture to win, we are making the necessary changes. Consistent performance is what we need for our North American business. Third, these two new brands are becoming relevant. They're not quite there yet, but they're becoming relevant to our portfolio, and that's important. I mean, we have three very well-known brands today. As a business, shareholders in the room should know we're willing to make those investments, take those initial losses where necessary, open stores in Athleta and continue to drive Piperlime and get to its true potential, not only here in North America but abroad. Fourth point, we have a significant runway on the global stage.
We tried to say in the annual report, you know, some of our peers, competitors who we look at, who we admire globally in the apparel business, are in 70, 80 countries. With the investments we've made in franchise and our corporate businesses, we're only in 30 countries. Only built out in selective corporate countries and some franchise countries I mentioned earlier. The potential for the business is significant. This combination, and the last point, which we don't talk a lot about at the annual meeting, is that the people in the room, the people who are here today who work for Gap Inc., who've been here a year, been here 20+ years, it's the culture of the company that sets us apart. When we bring it all together, it's how we show up.
You think of the founding family, you think of Doris and Don, you think of what they taught the business, how they approached it, how they saw it as more than just selling garments and selling clothes. They saw it as much more than that, and everybody in this business understands that. The culture of the business is 134,000 employees. Everything else I talked to you about are outcomes. It starts with who are the right people, do we have the right talent, and do we have the right culture? One part of our culture that we talk about a lot internally is do what's right. I thought for today's meeting, we'd do something a little different, just to shake things up. I didn't want it to be too predictable. We thought that we'd ask somebody in our business who works on the front lines of do what's right.
Her name is Dotti Hatcher. Dotti is our Executive Director of our Global PACE initiative, something that we feel very strongly about. This is how we deal with our vendor partners, with the countries in which we source, and it is only one example of how Gap Inc. makes the right investments to support its cultural beliefs. With that said, let me welcome to the stage Dotti Hatcher.
Thank you, Glenn. Good morning. I am honored to have been given the opportunity to share an overview of Gap Inc.'s Personal Advancement and Career Enhancement program, or PACE. This is a program I am very proud of and one that is deeply rooted in Gap Inc.'s culture and in our commitment to the communities in which we live and work here and abroad. In 2006, after 18 months of development and with guidance from prominent international research and development organizations, we completed the design of the PACE program. The program provides female garment workers with eight modules of life skills education, including communication skills, time and stress management, and health and nutrition. The women also have an opportunity to participate in enhanced technical skills training provided by the vendor.
Research shows that not only are PACE graduates more productive, they are advancing faster in the workplace than factory workers who do not participate in the program. Critical to the successful development of this factory-based program was our ability to leverage strong vendor relationships, not just transactional relationships, but those that have been built over many years through our Social Responsibility program, including those that monitor factory working conditions. PACE is innovative because of its multi-partner collaboration, scalable because of its global application, and sustainable because of the commitment vendors make to integrate the program into their ongoing factory training. Today, more than 5,000 female garment workers have participated in the program in Cambodia, China, India, Indonesia, Sri Lanka, and Vietnam. Later this year, the program will launch in Bangladesh. Without PACE, these women may not otherwise have the opportunity to learn and advance in the workplace.
Our first vendor partner in India employs more than 60,000 workers in 34 factories. Glenn and several of our senior executives have visited the program there and have heard directly from participants the positive impact PACE is having. The CEO of this company recently expanded his commitment and announced that his company will extend PACE to all their factories and all their workers by the year 2020. PACE has been developed as a Gap Inc. proprietary program. However, it is our hope that as others learn of the positive impact PACE has for workers and for business, they will join us in implementing PACE around the world. Perhaps the strongest testament to the benefits of PACE comes from Disha, a female garment worker in Bangalore, India.
When given a small cook stove in recognition of her perfect program attendance, she asked, "Why are you giving us a cook stove and not books and learning material? The cook stove reminds me of where I have been in the past. PACE has taught me where I can be in the future." I appreciate having this opportunity to introduce you to the PACE program. Thanks.
Thank you, Dotti. Dotti is one of our 40 and 40. After 40 years, we acknowledged and recognized our top 40 employees for a number of different reasons. I think I'm going to get a chance hearing her today recognize why she was given that honor last year. Thanks, Dotti. OK, with our remaining time, I'd like to turn it over now to people in the room and see if there's any questions from shareholders.
Morning. Thank you for having me. My name is Gavin McKiernan. I'm here on behalf of the Parents Television Council. We have more than 1.3 million members around the country and are shareholders in this corporation. Our goal is to protect children from graphic sex, gratuitous violence, and profanity in the media. First of all, I'd like to applaud you on your PACE initiative, as well as your many charitable acts in communities around this country. I think there's an opportunity for you to close the circle on doing what's right with your media purchases. In particular, in the past year, in the past, Gap has been somebody that we have lauded for their positive media purchases and endorsement of family-friendly entertainment.
In the past year, however, we've had occasion to send more than 30 letters to your office about some of the programs that you, in particular with your Old Navy brand, excuse me, have sponsored. In particular, program Vampire Diaries, where seeing that Old Navy paid for where a character reaches into the heart of a female, pulls out her heart to kill her. In another show that Old Navy helped to put on the air, Family Guy, American Dad, Gossip Girl, in one episode that Old Navy supported, there was a plot line where a father was using crystal meth and decided that it would be a good bonding experience for him and his teenage son to do this together.
I would like to ask you today, on behalf of our 1.3 million members, if you will pledge to improve your media practices to come back to where you had been in the past, because it is not just about the millions of children who have watched these programs, which without Old Navy and, of course, other companies as well, without their funding, would not have been on the air. It's also about the way that people view your brand. A recent Harris poll pointed that 27% of consumers would not purchase or would avoid a certain brand if they were displeased with things that they sponsored and supported in media and other places.
I plan to go back to our more than 1 million members, as well as the many media outlets that pay attention to our opinions and stances on these issues, and let them know what your response is if you're interested in returning to better media practices and if you would like our assistance in working with your marketing and any contractors you have that work in this field.
OK, thank you. I think as you said at the beginning, the company has a phenomenal reputation and history, not only what Dotti talked about today, with our consultants here today , what we do for the foundation, how we give back in the community. I think our practices in terms of the quality of our creative and the work we put together, whether it's inside our stores, the marketing we do, I think it's been exemplary in the last, at least the last four years I've been here. As you stated correctly, I think there's a history of that within the company. In terms of the media buys that get done, I know those are done very scientifically.
I'm not sure how much time gets spent trying to analyze whether the show is that an Old Navy commercial in this case, because we don't do television for any of the brands, whether the show, whether the quality of the show and what it may mean in terms of the people who are watching, young people who are watching, I don't know how much that goes into a media buy. My commitment to you, at least today, Tom Wyatt's here, is to talk to Old Navy and talk to the team that does that and find out when they actually make the buy to get the most amount of impressions possible for that brand, whether there's another filter that they should be considering in terms of that buy. That's a piece of information I wasn't aware of.
I see the, obviously, the creative that Tom does, and I know that it's about family, it's about the brand. Some of the shows you mentioned, I've never got a chance to watch, so I'm unfamiliar about those. I'll definitely talk to Tom and ask him if that's a further filter they should be considering.
Hi, I'm Yaso Natkunam. I'm a shareholder. I have a question about your international partnerships, trade partnerships, particularly with Sri Lanka. Now, this is a country that for some time now, there have been some concerns about human rights violations. This is not about labor standards or, very commendably, as Dotti already talked to us about PACE, which is one of the countries that PACE is also operational. My concern is that of human rights that the country has been charged with. Just a few weeks ago, the United Nations released a report asking the government of Sri Lanka to investigate war crimes and crimes against humanity. There are ongoing human rights violations and suppression of the media. These are serious concerns, and the government of Sri Lanka has actually denied these allegations.
There are also going to be International Criminal Court investigations that have been called for, and the U.S. State Department, including a House resolution and a Senate resolution that have been passed asking the government of Sri Lanka to investigate these crimes. As a socially responsible company, I am wondering whether you have any plans to stop sourcing from Sri Lanka or somehow bring to bear some international pressure through your partnership there. Thank you.
We have been sourcing for other shareholders who may not be aware of, been sourcing from Sri Lanka for 20 years. We're clearly aware, particularly recently, of some of the human rights accusations we made. I know when I was in, recently with Stan Raggio , we were in Delhi. We met with some of our Sri Lankan vendors, had a conversation with them about it, and got some, because for me to try to judge it from a distance is inappropriate. We were in Delhi. We spent some quality time with them. I know Dan Henkle is here today, and Bob Fisher went to a human rights conference in Egypt, at which point this was discussed, and a lot of other parts of the world were discussed, because we source in 50 countries.
At times, we run into situations like this in Sri Lanka where there's been ongoing friction and battle and bloodshed. To what decision we need to make versus whether we should be still sourcing in that country, which is what we've done for 20 years, is that good for the country versus whether we should pull out. What I can tell you is that we've been in touch with the U.S. government. We've been in touch with the United Nations. We've done some good work in Bobby's area, and we're constantly monitoring it. If we felt that that was the right decision to make and said because we're on top of it, we would make that decision very quickly.
Right now, that's not the decision we made, but we continue to stay on top of the issue because, as you are, we're just as concerned to make sure that we are not providing jobs in countries that maybe the behavior of that country and what is going on is inappropriate and does not fit with the values of Gap Inc.