It’s no secret that in recent years Gap, like many mid-tier fashion brands, has been struggling to compete with the rise of ‘throw-away fashion’ companies like H&M. Their price point is high, their look is dated, and the company itself has struggled with constantly changing executive leadership.
Unfortunately, for their employees, this means Gap will be closing one-fourth (175 total) of their 675 stores in North America over the next few years. Additional closures are expected to hit a limited number of European locations, though the exact number has not yet been disclosed.
Manhattan Gap Clothing Store (Photo by Chris Hondros)
Art Peck, Gap’s Chief Executive since February of this year, believes these closures are necessary if the brand is to reposition itself for future success. Though these cuts will trim about $300 million from annual sales with additional costs of approximately $140 million to $160 million from lease buyouts, inventory write-offs, and costs that come with shrinking a headquarters workforce, beginning in 2016, Gap expects these changes to generate annual savings of about $25 million.
The real challenge for Gap won’t be in savings, though: it will be in fixing its product. Muted tones, straight silhouettes, and outdated trends have plagued the company’s line for years. Peck himself has admitted to these issues and alludes to mixing up the assortment, including more vibrant color palettes, the introduction of unique patterns, and designing for a more feminine look and shape. It will be interesting to see Gap mix things up and give us something new. Who knows, they may even win back some of those core customers that have been over at H&M this whole time.
from Mark Cohen http://ift.tt/1GvTTFA
Mark Cohen NYC 