Gap, Inc. in the News

Not a good day for Gap employees, though this may signal the beginning of a new phase for the company (I believe it does).  Gap is closing a bunch of stores and is trimming the staff at corporate headquarters.

http://www.newsweek.com/gap-plans-shutter-175-stores-cut-jobs-343336

Here is a snippet from that piece:

Gap is planning to close 175 stores in North America. Of those, 140 will close this fiscal year, the company announced Monday evening.

All of those affected will be regular Gap stores, rather than outlets or factory shops. An undisclosed number of European stores are also set to close. This will leave 800 Gap stores in North America, and about 1,600 worldwide.

“Our customers and employees want Gap to win,” Jeff Kirwan, global president for Gap, said in a statement. “We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores."

The Washington Post has a good read on Gap and Millenials:

http://www.washingtonpost.com/news/morning-mix/wp/2015/06/16/how-millennial-shoppers-have-made-gaps-basic-look-obsolete/

Here is a snippet from that piece:

During its most successful run, Gap’s fashion catered to children of the 1980s and ’90s — first with plain T-shirts and blue jeans, then with button-downs and clean-cut khakis. Artists and musicians helped popularize the androgynous look, one that seemed to define Generation X, whose shoppers strove to fit the trend.

It was a snapshot of pop-culture. In 1993, it was used as fodder for a “Saturday Night Live” skit “The Gap Girls.” In 1995 and again in 1998, Sharon Stone sported Gap shirts on the red carpet.

But the idea that once made Gap so popular has become obsolete.

I was part of that generation that saw all things Gap as a good thing.

Back to the overarching story here.  We've seen a slew of retailers make moves that look like what Gap is starting here.  Trim middle-management staff, trim under-performing stores, all of which provides annualized cash, and invest in digital to craft a new customer experience.  Staples in 2013, Macy's, Target, and more and more and more.  Best Buy is opening an innovation lab in Seattle, Walmart has one outside San Francisco, and even Wendy's just announced the same.  Digital is the pathway for brick & mobile.  Get on it, or die slowly.

Happy Reading,

J.W. Gant


**UPDATE** Excellent addition to the above links can be found here:

http://www.buzzfeed.com/sapna/gaps-store-closures-highlight-fate-of-americas-worst-malls

Here is a snippet from that piece:

While Gap hasn’t specified where it will close stores, the announcement underscores the fact that America’s malls have become increasingly bifurcated in the past decade.

At the highest end, retailers fight for space in what analysts refer to as “A” malls, which are home to brands like Apple and Tiffany & Co. and lure educated, wealthy shoppers. Lower down the list, “C” and “D” malls (where D means “dead”) are suffering from declining foot traffic, sputtering sales, and the exit of national retailers.