Gap Inc. leans more heavily on Old Navy and Athleta
Even within the troubled world of brick-and-mortar apparel retail, Gap Inc. has been notable for its struggles in recent years. Now the clothing retailer is closing a significant number of underperforming stores.
Gap recently announced the impending closure of 200 Gap and Banana Republic stores through 2020, about 10 percent of those chains’ total locations, according to The Street. In the same timeframe, Gap Inc. plans to expand the brick-and-mortar footprint of its more successful chains, opening 270 Old Navy and Athleta stores.
Back in 2011, Gap made a similar move, announcing the closure of about 21 percent of its mainline Gap stores in North America. At the same time, it announced the opening of 50 Gap Outlet locations and an increased focus on foreign markets.
The company’s most recent quarterly report follows a now-familiar trend, with same-store-sales from Gap and Banana Republic decreasing among rising numbers from Old Navy.
Old Navy has been the standout brand in Gap’s portfolio since the company’s three-year run with Stefan Larsson as head of global sales. While the brand experienced a slight decline after Mr. Larsson’s departure for Ralph Lauren, the brand seems to have righted itself in recent quarters. (Mr. Larsson left Lauren earlier this year because of a conflict with the company’s founder regarding that brand’s direction, according to Bloomberg.)
In a retail landscape many consider overstored, it has become more common for chains to shrink their brick-and-mortar footprints. But closing stores to save on real estate isn’t the only strategy Gap has been using to try to turn its business around.
In 2015, the company announced that it would be adopting new supply chain strategies informed by Old Navy’s success with a quick speed to market. Around that time, it also began discussing a tech-enabled strategy dubbed Retail 3.0 meant to bring the company back to its heyday. One of the innovations discussed was the selling of clothing through next-gen vending machines, but the initiative never came to fruition. More recently, Gap began developing an augmented reality try-on app for clothing.
- Why You May Not Be Able to Shop Inside a Gap Store Soon – The Street
- Gap to shutter 21 percent of its stores – RetailWire
- Ralph Lauren CEO Leaving After Creative Clash With Founder – Bloomberg
- Is a trendless fashion industry killing Gap’s business? – RetailWire
- Can Gap beat fast fashion chains at their own game? – RetailWire
DISCUSSION QUESTIONS: Is Gap Inc. going fast and far enough in closing its namesake banners and opening more Old Navy and Athleta locations? Will having fewer Gap and Banana Republic stores help revive those struggling chains?