how to Play it

“brick and clicks” and “eco-friendly” are great buzz-phrases for retailing startups, but don’t count out the ability of incumbent giants to adapt to the new Millennial-focused era. Gap Inc. has struggled to find the right mix of products and pricing as its customers move toward digital shopping, but recent improvements are beginning to take hold. same-store sales have increased and gross margins have expanded, and sales at Gap’s old navy division are particularly strong. turnaround investors can take comfort in Gap’s solid $1.8 billion cash balance compared to $1.3 billion in debt and positive cash flow. the stock has a 3.3% dividend yield. another beleaguered retailer with an even higher dividend yield, at nearly 5%, is kohl’s, which is seeing improving traffic to its stores. its digital sales are growing at a 20% rate.