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Thursday August 9, 4:29 pm Eastern Time

By Anna Driver

CHICAGO, Aug 9 (Reuters) - No. 1 U.S. apparel chain Gap, which in July cut its headquarters staff by about 10 percent, said on Thursday it may eliminate up to 790 additional jobs under efforts to bolster profits and improve operations.

Gap, which cut 1,300 corporate jobs in July, said it would take a second-quarter charge of up to $30 million to cover costs related to the

change.

Gap, known for its casual, fashionable apparel, also reported on Thursday that sales at stores open at least a year fell a greater-than-expected 12 percent in July from a year ago. It said its second quarter earnings would meet Wall Street forecasts.

Shares of Gap ended off $1.57, or 5.78 percent at $25.60 on the New York Stock Exchange. The stock, which is down 20 percent since the

company warned on second-quarter sales on June 7, has underperformed the Standard & Poor's retail index which is flat in the same period.

In a recorded call releasing more details about monthly sales data, San Francisco-based Gap said it will cut 240 positions in its Banana Republic field organization, and may eliminate 425 jobs at two of its distribution centers in Ventura, California, and London which are set for closure.

Gap also will move its London corporate offices to a new distribution facility in Rugby, England, affecting 125 jobs. A spokeswoman for Gap said all employees affected will be offered transfers within the company. The retailer, which has seen sales and profits slump in recent quarters, has made a number of management and operational changes in an effort to revive its business and has also scaled back its square-footage growth plans for 2001.

Credit rating agency Standard & Poor's said on Thursday it may cut Gap's debt ratings, citing disappointing sales trends, which hurt earnings. S&P also cited merchandising problems and said improvements in same-store sales in the second half of 2001 may be more difficult to achieve.

Gap said that of the 1,300 corporate jobs cut in July, 800 people were laid off, while 500 vacant positions will not be filled. When it initially announced the cutbacks in June, Gap had said it expected to trim 5 percent to 7 percent of its corporate staff.

The job cuts are expected to result in annualized cost savings of $65 million to $75 million, with $30 million in savings coming in late 2001.

Despite the lower same-store sales, Gap said it expects second-quarter earnings of about 11 cents a share, excluding unusual charges. That figure matches the consensus estimate of analysts polled by Thomson Financial/First Call. A year earlier, Gap earned 21 cents a share in the second quarter.

For July same-store sales, analysts had expected a decline of about 4 percent to 9 percent. Including the $30 million charge, the company expects to earn 9 cents a share. Gap, which employs 166,000 people worldwide, is slated to report second quarter earnings on August 16.

Thursday August 9, 5:13 pm Eastern Time, By Tim McLaughlin

BOSTON, Aug 9 (Reuters) - Nike Inc., the world's top maker of athletic shoes and apparel, cut in half the annual bonus of company chairman Philip Knight as the firm's stock price slipped and rival Reebok International Ltd. picked up market share over the past year.

Knight, 63, received a $663,000 bonus for the fiscal year, compared with $1.33 million in 2000, according to a U.S. Securities and Exchange Commission filing made on Thursday. The bonuses of other top executives at Nike also were cut, according to the company's annual proxy filing.

``Sales and earnings growth were not as high as we planned and that's reflected in (Knight's) compensation,'' Nike spokeswoman Corby Casler told Reuters.

Beaverton, Oregon-based Nike made progress on some of its financial goals and raised Knight's salary 3.8 percent to $1.3 million from a

year-ago $1.2 million. During the fiscal year that ended May 31, Nike's stock slipped about 4 percent while the company lowered sales and profit targets amid inventory software problems and Reebok's emergence in the mid-priced athletic shoe market. Nike's revenue in fiscal 2001 increased 5 percent to $9.5 billion. Full-year net income totaled $590 million, or $2.16 per diluted share, compared with $579 million, or $2.07 a diluted share, in 2000.

During a March conference call, Knight told Wall Street analysts his performance did not rate ``high marks.'' Nike's compensation committee awarded Knight $92,000 worth of Nike class B stock under the company's long-term incentive plan. Knight did not receive any stock option awards.

Other incentives granted by Nike included forgiving part of a 1994 $500,000 loan to Thomas Clarke, Nike's president of new business

ventures, for the purchase of a second home. As an incentive to stay with Nike, the company agreed to forgive $100,000 of the loan starting in January 2000 and on each of the four anniversary dates thereafter, as long as Clarke stays with the company, the proxy stated.

Shares of Nike closed up 65 cents, or 1.35 percent, to $48.65 during Thursday trade on the New York Stock Exchange. The stock is off about 13 percent this year, underperforming the 10 percent decline in the S&P 500 Index.