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Fashion CasuGap struggles to find the best fit for its retail,People pay for their purchases after shopping during the grand opening of Japanese-based clothing store Uniqlos Fifth Avenue location in New York October 14, 2011. Can Gap Inc. stop competitors like Uniqlo from eating its lunch?
By Martha C. WhiteActress Sharon Stone mously wore a Gap turtleneck to the Oscars in1996, but the brand is a long way from the red carpet today. Parent company Gap Inc. announced plans late Thursday to shutter 21 percent of its U.S. stores when their leases expire, part of a 34 percent reduction over six years.
Can the onetime iconpull off a reinvention that will satisfy shion-forward consumers conditioned to expect low prices for casual basics like jeans and T-shirts?
A push overseas, particularly into emerging markets where the idea of American style still has cache, could help. The reality is Gap and Old Navy are at or near maturity in the U.S., says Thomas Filandro, a senior retail analyst at Susquehanna Financial Group, a market maker inGap Inc. securities.
He says web-only footwear brand Piperlime, which sells other brands as well as private-label items,designer handbags might offer a road map for reinventing the flagship brand.
But Goldman Sachs analyst Michelle Tam warns of a bigger secular issue in a recent research note; namely, the companys huge retail footprint demands that Gap be everything to everyone — a mandate the retailer cant fulfill. Attempts to target teens and young professionals made the brand look unfocused. A disastrous revamp of its logo last year added to the sense among shoppers andinvestors that Gap was grasping for straws to remain relevant.
Gaps ubiquity at the end of the 20th century was helped along by the burgeoning business-casual trend, but when the dot-com bubble burst, khakis and polos as workwear quickly went the way of the tech-IPO craze.
With the decades first recession, consumers turned to competitors — including Gaps sister brand, Old Navy — which cranked out basics that cost much less. More aspirational shoppers, meanwhile, passed over Gap for its other brand, Banana Republic, or competitors like J. Crew, which evolved from a staid, catalog-driven company to a formidable brick-and-mortar Gap competitor under Mickey Drexler, the Gap Inc. CEO who was ousted in 2002.
The premium denim trend took away another piece of Gaps foundation. There has been this explosion of premium jeans and they missed it, says Michael Roberto, professor of management at Bryant University. Jeans were a great entry point. They could run those jeans at very affordable prices and count on up the margins on other clothing.
Shoppers have also come to expect brands to immediately reflect current shion trends. Fast-shion chains like Zara, H&M and Uniqlobring the colors Bags Wholesale Online, shapes and cuts of haute couture into the mall at prices that rival Gaps. Theyre really nimble, and the Gap hasnt been that nimble, says Roberto.
Uniqlo, in particular, is aiming dead-center for the brands bread and butter. Stores, including a flashipthat opened on New York Citys Fifth Avenue Friday, are stocked with colorful, casual basics that consumers literally lined up around the block to purchase. Uniqlo, even though they dont have a huge footprint in the market, has branded themselves as a place where you can get basics for every season at a good price, says Kwesi Blair, retail strategist at Robert Burke Associates.
Susquehanna Financials Filandro says Gaps Piperlime model, where it sells other brands as well as private-label shoes and a growing amount of apparel, could be expanded. Customers dont typically any longer dress themselves head to toe in the brand. I think customers much more want to send their own message,handbags cheap he says. If Gap could rebrand itself as a destination for shoppers looking for a variety of looks, it wouldnt have to chase fleeting trends as aggressively.
Gaps long-term goal to have 30 percent of its revenue come from outside the U.S. by 2013 is another positive step, Filandro says. The brand plans to triple the number of its stores in China alone and a less capital-intensive model of overseas growth that relies more on franchises takes some of the risk out of the equation for Gap Inc. I think this has the potential to play well outside the U.S., he says.
Shares of GAP are down more than 20% in six months, reports CNBCs Courtney Reagan from GAPs investor meeting.
35 comments
Not to sound like a pedant, but seriouslyas a journalist, could you mind the spell-check? Some of this was confusing and unreadable. Its not that hard, and not like this was a rushed-out breaking story.
Back in the day, the Gap was where you got great, basic, classic casual clothes. The jeans were thick and got softer and lighter everytime you washed them until they were perfect. You knew you could get well made clothes, with truly classic lines, at a good price. They werent especially pop culture trendy and they definitely didnt have the cheaply made, look of the hour styles that are sure to be outdated the next week. You could wear those things through the years and they would STILL be good, soft, stylish Ugg Outlet Store, and waaaay cool. Oh, what I would give for a pair of those great jeans today. With a pair of worn in Fryes, and a sheepskin coat…
I used to spend a couple thousand dollars there every year. The look was classic and the clothes lasted as long as you took proper care. When the Gap started to move away from classic khakis, white shirts, etc. for women I stopped shopping there. The look and fit went completely teen/college and the quality, in some cases, is just not there. Go back to the original recipe and I will definitely take another look.
They probably moved production overseas years ago. This article is about increasing SALES overseas. Which means foreign money coming in to a US company.
I try to buy American-made when I can, but its difficult, unless youre willing to spend the money. $350 shoes, $150 shirts, and $80 ties if you want quality, American Apparel if you dont.
Their jeans are the worst on the market right now. 10 years ago, you could NOT ruin a pair…now, in 4 months there are holes in places that shouldnt have holes and they ll off ofter a few hours. They certainly arent worth the money anymore. Go away GAP…good riddens.
Guess what? There are men with money who are bigger than a 38 waist. Cant those scrawny teenagers support your over saturated market?
I used The Gap in UK since the late 80s after late 90s sizes are always small and fit only petite girls. I can hardley find my medium size and its so frustrating. I used to swear by the Gap but now I am very sad that I go in and come out with nothing. Last time I went was about 4 or 3 month ago.
I bought a denim pant and the staff said to me give us your email and we will send if I can remember a voucher or something like that to give you a discount for your next visit. The email never arrived so that was a big lie as r as I am concerned.
Also lenin and voscous materials are ke too they are no longer orignal like before. Its a shame really The Gap was not one of my top but was the top high street store for my casual gear. I am afraid its no longer the same. Please do something about it because there are real ns out there for The Gap. For women make sure you have all sizes for every thing not just only for a couple of trousers on the whole shop. Good luck
Like many companies,Ugg Boots the Gap is focused more on growth markets like China, than those in decline like the U.S.
The people GAPs clothes are women and children in third world countries. The abuse is awful and everyone should do the research. The only place I would like to see GAP is OUT of business, living on the streets and eating out of garbage cans. They should be joined on the streets by President Obama and every single politician that votes for the lie of free, the free market and free trade.
Who decided women needed spandex in their jeans? Doesnt matter the brand, they all have it and it sucks. The jeans fit perfectly right out of the dryer and they grow several inches during the course of the day. I have been complaining loudly for a year to every manucturer who will listen and have not gotten a single response. No more jeans for me.
The spandex was a way of diluting the cotton, the jeans cheaper to produce. Notice that the material got thinner when the switch happened too.
There are too many clothing stores already. If gap closed all their stores, no one would go without.
I have spent a lot of money at the gap. One day I walked in and said: What the hell happened here. There were colors a normal man would never wear. They are not what they used to be, although I still go there when I need some jeans. You cant find a nice t-shirt there; not like in the late 90s. There t-shirts used to be awesome.
GAP used to be known for classic, comfortable pieces that you could count on for quality wardrobe staples that always looked fresh and modern. Now, GAP is another teeny-bopper Aeropostale clone with cheaply made, yet over-priced junior apparel. I used to love GAP — now I rarely shop there.
Not to sound like a pedant, but seriouslyas a journalist, could you mind the spell-check? Some of this was confusing and unreadable. Its not that hard, and not like this was a rushed-out breaking story.
Old Navy has gone past its prime…..back in the day it used to be THE place to buy clothes, but now its turned into more of a womans and children clothing store. I remember going to an Old Navy and half of the store was mens and half womens…now Fashion CasuGap struggles to find the best fit for its retail mens clothes are only in maybe a 1/4 of the store with the rest for women and children. Not to mention their quality has gone down. I can go in there and buy two shirts labeled as the same size, yet when I put them next to each other they are of vastly different size. The t-shirt bric is sub standard to what it once was Buy Ugg Boots Online, so any t-shirts I buy there are good for maybe one or two wearings until they are stretched enough that they are only good as something to sleep in.
I mentioned this in another comment – at Banana Republic, J. Crew, and Club Monaco at the mall near me, the mens department is completely invisible from the front of the store. BR actually has it all in the basement (which used to be the suit department of a huge mens shop that was there for decades).
If Americans are getting bigger, how can you market just to impossibly skinny people and expect to maintain a customer base? I only know a few people who have reached the venerable age of thirty that can even fit into anything from these teens-and-tweens places.
Hey if your going to talk weight and clothing stores, only in America do t people look like they stuck a tire pump up their re-ends. Clothing stores make clothing for bodies, not balloons. Americans are definitely getting bigger, and companies who market to impossibly skinny people as you put it, are designing for those who stop from gorging themselves. Hopefully those gorging will get the idea that unless you want to wear a tent, you need to put the breaks on the food. There is nothing impossible about maintaining your weight other than self control. My god…it is not a mystery.
momo-588486: Uhhhhhhh….not all of us gorge ourselves. Sure, Id like to lose 10-15 lbs but I like to think a medium would fit a medium sized body. Clothing manucturers and retailers are marketing clothing which no longer offer sizes that fit real people. Medium and large are the new X-small and small.
The Gap used to be known for classic, comfortable pieces that you could count on for quality wardrobe staples that always looked fresh and modern. Now, Gap is another teeny-bopper Aeropostale clone with cheaply made, yet over-priced junior apparel. I used to love GAP — now I rarely shop there
Some GAP executives decided that to keep the stock prices high,Sale Ugg Australia and investors interested because of growth, it was best to move the companys focus of apparel to those demographics that spend the most money on clothes, all the time. young teen girls, and young women to ages 25.
Thus those consumers like the poster quoted, could no longer find the clothes they wanted and went elsewhere to find them. After that happened, the brand declined. Why? because teens girls and young 20 something women typically do not have brand loyalty as ds and shions that change almost every quarter typically have these shoppers going from store to store to find them. Its only those who want classic comfortable apparel, who have brand loyalty because of that, that frequently shop at the same stores.
Still the Gap executives grasp for that coveted demographic, young female teens and 20 somethings, who spend almost all their money on clothes and accessories rather than on those customers who made The Gap the place they wante to stop at. To quote again
classic, comfortable pieces that you could count on for quality wardrobe staples that always looked fresh and modern.
Last time I was in a Gap store it was a confusing mess. At least unlike J. Crew and Banana Republic, they dont hide their mens department way in the back like theyre ashamed of it.
I used to buy all my Jeans and T-shirts there. USED to is the key word. I dont know what happened but the quality just went down the toilet. Sad really, they should have just stuck with what they did best instead of trying to be shionable.
The jeans were classic, well priced and fit well…..25 years ago. I stopped shopping there after college, because I dont need trendy jeans with inferior bric.
I shop at Lands End now for jeans and pants…
The Gaps slow demise could have been avoided if the company read the reviews customers left on its web site. There are two basic problems (as I see it): Quite a few years ago the Gap began using inferior denim for its jeans, while still charging close to $60 for a non-sale pair. I purchased two pairs of 1969 jeans last year and both pairs have already llen apart. They both ripped in the same place–at the back pocket.
Also best handbags wholesale, Gap jeans are the most inconsistently sized jeans available, it impossible to purchase them online. The jeans I purchased were made in Mexico. The exact same jeans made in other places fit completely differently.
These comments are available by the hundreds (perhaps thousands) on the Gap site in the reviews section.
As much as it pains me to say it, I can go into Walmart and buy a pair of the Signature Levis jeans without even trying them on. Every pair of the same size and style fits exactly the same. Did I mention the Levis are usually $19.99?
The Gap doesnt need some ncy restructuring; it needs to return to consistent quality and the customers will return.
So true, Dianne. I have several pairs of 1969 jeans, all the same style and same size. The lengths differ by as much as two inches. That is ridiculous.
I dont live near a metro area right now so I have to shop online. I ordered a pair of Gaps nicer pants. The fit was perfect (rare for me, especially with mail order) but the side seam was rippled on one side so I had to return them. Disappointing.
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Fred Tappan
I can explain in two words why, in the 1980s, Ann Taylor went from uninspired to super awsome, why, in the 1990s, Gap went from uninteresting to ultra cool and why, in the 2000s, J. Crew went from unfocused to cutting edge: Mickey Drexler. I still havent forgiven Mickey for taking J. Crew private; I was a bundle off their stock appreciation.
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