WESTCHESTER COUNTY, N.Y. (TheStreet) -- Anyone walking by a Gap (GPS) - Get Report in the past few months should have seen it coming: big time gross margin degradation. Gap had sales tape wrapped around front-window mannequins. How is that for subtle? They also ran 5 buck shirt specials that even lured shoppers who haven't bought clothes since the early Clinton years.

Gap reported its second quarter this week and it was--sure enough--a gross margin story. The company still managed to sell items, but only because it was all but giving them away. This is obviously no way to run a business: as a general rule, if you are losing money, you can't make it up on volume.

But in a shocker, the business media didn't focus on the gross margin figures. They mostly glossed over them, referred to them obliquely or mentioned them incompletely.

The Associated Press, for example, made no specific mention of the gross margin figures. It spent a lot of time on same store sales, a media fixation. Reuters, curiously, compared the quarter's 36.9% gross margins with an analyst's estimates, which were even lower. That made the number appear good. Reuters did say the number was "down by a lot from last year," but failed to go beyond that generality and give us the figure.

The Wall Street Journal told us that Gap reported a margin decline of 2.7 percentage points, but neglected to give us the base. Did the Gap fall off of a base of 10 or 90? The answer matters.Barron's gave us the answer: gross margins were 36.9% versus 39.6% in last year's quarter. Ouch.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven� column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;

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