Dive Brief:

• A massive fire at Gap Inc's distribution center in the Poughkeepsie area of New York was intentionally set, according to a release by the New York State Police Tuesday.

• The ATF National Response Team found the Aug. 29 fire was "incendiary in nature," meaning it was intentionally set, the state police said in a statement. The Fishkill distribution complex represents 10% of Gap's nationwide warehouse capacity and employs up to 1,300 employees, although none were injured and workers will continue to receive pay, the Poughkeepsie Journal reports.

• Gap is scrambling to meet online orders and move inventory to stores after the fire enveloped the distribution complex last week. 

Dive Insight:

The fire that took place at one of Gap Inc's biggest distribution centers, now understood to be arson, has been the latest in a string of setbacks for the retailer. 

Gap is a picture of an American apparel brand that, after falling far from grace, is showing some life thanks to significant style improvements at all three of its major brands. But it remains to be seen whether those improvements mark an upward trend for the retailer. Many analysts are taking a wait-and-see attitude about the company, despite some recent evidence that its sales are slowing recovering. Gap still expects to close 50 stores this year.

The company recently reported adjusted second quarter earnings of 60 cents per share, compared to 64 cents a share a year ago. Q2 sales were $3.85 billion, down from $3.90 billion year over year. Gap also lowered its fiscal year guidance and said it expects adjusted earnings between $1.87 and $1.92 per share for fiscal 2016, missing FactSet analysts expectations of $1.95 per share. 

Gap CEO Art Peck noted on a conference call following the earnings announcement that Gap has suffered with customers because of inconsistencies in fit, an issue that has also created a problem of returned merchandise, especially for online orders, and wreaked havoc with the supply chain.

The fire isn’t helping. Poonam Goyal, an analyst at Bloomberg Intelligence, told Bloomberg earlier this week that the retailer can recover from the blow, but that it will hurt nevertheless. “I definitely think it’s going to have impact on sales,” she said. “There’s definitely going to be some disruption.” 

To mitigate the fallout from the fire’s destruction of its facility, the company is shipping goods from stores in the region as well as from warehouses in Ohio and Tennessee.