Gap announced on Monday that 175 stores of the iconic brand will be closing their doors across North America, followed by personnel cut of 250 employees from Gap’s headquarters.
The boom experienced by Gap-created clothing took a swiping percentage of the public in the 1980s and 1990s. Nostalgically, we still screen those photos of simple one coloured T-shirts accompanied by the simple blue jeans or the khakis and button downs.
However, nostalgy aside, the present places street fashion far from that of the Generation X, far from the regimented uniforms that Gap seemed to create.
Analysts nationwide point to the fact that customers have visibly changed their choice, the way they shop and where they shop, rendering many house-hold names in the retail fashion scrambling with too many puzzle pieces.
It is time to adapt to a new era of retail fashion and that is why Gap is looking at ways to unload a recent history of bad calls and poor sales salted by stock plunges.
Currently at the helm of Gap, Art Peck, chief executive officer took the position in October. Since then he relentlessly worked to bring Gap and Banana Republic back on the floating line. To do so, all unnecessary attachments needed to be cut off. Initially, Jeff Kirwan was named Gap president while the creative director was scrapped off the payroll.
Rebekka Bay, former creative director, fell short of fulfilling her promises of breathing new life into the product lines and thus boost up sales. To this extent, the decision of Peck was to let her go and instead bring Gap and Banana Republic on the right path by reducing the number of stores and employees.
“Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of the consumers”,
Art Peck declared.
The problem identified by Peck is as reals as can be according to experts across the financial spectrum. Yes, Gap failed to understand and adjust to a changing market. Generation X dawned and Millennials came to the front.
What characterizes this generation is a stronger sense of individuality, uniqueness and a lax interest in brand and price tags. Whatever tickles the fancy of millennials goes into their wardrobes. Preferably, clothing pieces that make a personal statement. Expensive doesn’t mean good and simple is not always more.
That is how H&M, Uniqlo or Forever 21 are rating fairly above GAP. They adjusted their brands to new demands of the market.
In a run to prop the business, Gap will be closing the 175 stores across North America, with a first batch of 140. The San Francisco headquarter will also be suffering a cut in employees. But the gains that will come in after the cuts are completed will be invested in new, redesigned, more appealing products.
The final outcome is expected to be 500 regular-price store and as many as 300 outlets spread on the North American territory.
A smart move considering that actual traffic in retail stores has dropped significantly in favor of online shopping.
Following Gap’s Art Peck announcement, the shares of Gap rose by 1.7 percent after a fall of 9.3 percent throughout the year.
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