Gap Announced The Closure Of 175 Shops To Save Themselves, Focusing On Electricity Providers

In the near future, it can be described as the darkest day of Gap. It announced that it would close 175 stores in North America, accounting for 1/4 of the total number of shops. This is a more objective figure, and it will also cut 250 employees at headquarters. So far, the brand name of the largest clothing retailer in 1969 is facing severe challenges.

Previously, Gap The company has also made a lot of efforts to try to save Gap's past glory, such as developing cosmetics product line, no lower limit sales promotion, paying attention to the electricity supplier, changing the CEO, etc., but still did not get rid of the fate of the store. Next, it will copy the successful mode of its brand Old Navy.

Gap announces closure of 175 shops

You may not know that Gap is a cowboy. The brand that has been established for nearly 50 years has just announced that it closed 175 stores in North America (accounting for 1/4 of the total number of shops). Only 140 will be closed this year, and 250 employees from headquarters will be cut off. The Gap group, the parent company of Gap, the largest clothing retailer in the United States, is facing serious challenges.

After the implementation of this measure, the number of Gap stores in North America will be reduced from 977 to 800, including 500 stores and 300 outlet stores. But Gap will remain in more than 50 countries, more than 1600 direct or authorized stores worldwide.

Gap performance continues to decline

Regardless of the number of posters and how to create an atmosphere, GAP's sales figures show that Gap's same store sales have declined for 13 consecutive months, affecting Gap group's same store sales by 1%. (Gap)

The main brand Gap is becoming the brand of the whole GAP group. In the first quarter of May 2, 2015, GAP income was recorded at 3 billion 657 million US dollars, down 3.1% from 3 billion 774 million US dollars in the same period last year. Net profit was 239 million US dollars, down 8.1% from 260 million US dollars in the same period last year; earnings per share declined from 0.58 US dollars to 0.56 US dollars in the same period last year, decreasing by 3.4%.

Reasons for the decline of Gap performance

The root cause of the decline in Gap performance is that the old casual brand is very traditional from material to design. The core strengths of ZARA and H&M are fast response design and supply chain, in place marketing, attracting young 90's audiences by various categories and fashion sense, and the core advantage of UNIQLO is actually the new fabric research and development and production retail mode. The fleece, feather and down of UNIQLO, and Heatteck, are all materials of technological content. They not only have competitive advantages, but also can reduce costs and attract more customers than ZARA and H&M.

Facing all kinds of attempts of competitors, GAP is very traditional from material to design. The cycle of its design from shop to shop is 10 months, about 3 times that of ZARA and H&M. Its new CEOArtPeck has previously said it will shorten the cycle to 30 weeks, but it will still be about two times as long as its competitors.

Gap efforts to save oneself

　　 Future focus Online retailers

GAP's new CEO Art Peck recently said it was looking for a new way to reset its brand goals. This involves the 3 sales of Peck, upgrading the company's electricity supplier, mobile terminal and full channel retail capabilities. The CEO, who comes from the digital sector, seems to have a special interest in the business.

It is reported that Gap is still doing well in the most fashionable O2O field of the electricity supplier. GAP is actively promoting the "online booking store" project. The group has 3749 stores in 51 countries, of which 3309 are self owned. It is reported that Gap plans to expand the net booking store to 1600 stores before the end of the two quarter of this year. Up to now, a total of 500 thousand orders have been generated in Gap's "online booking store". Compared with pure line or pure line, the amount of "net order store" is much larger. Due to its good results, Gap plans to highlight the "reserved" button on the website's merchandise page.

Frequent discount without lower limit

In the past year, Gap has adopted a continuous high sales promotion in order to restore its declining performance, hoping to attract more consumers. If you have bought Gap's clothing in the past year, you probably won't buy it at full price. Gap has become a synonym for continuous promotion. In this brand store, all products are more than forty percent off discount, or even thirty percent off more. Consumers will often receive brand email saying "the last day, 25% off promotions", or "the last few hours, the full 100 minus 45".

But with the increasing discount, many consumers are reluctant to buy goods at the original price. At present, the Gap strategy has been adjusted to start reducing sales promotion activities to enhance brand value.

Trying to sell cosmetics

Birchbox is a cosmetics business website in the US, providing cosmetic trial service ordering service. After ordering, you can receive a customized gift box, which is suitable for your skin and needs, including skin care, make-up, makeup tools, etc. The price is 10 dollars per month.

Recently, Birchbox will work with Gap to open temporary counters in seven Gap flagship stores in San Francisco, Chicago, Losangeles, Houston and New York. Customers can buy cosmetics provided by Birchbox here, or make a gift box by themselves. Although this temporary counter will only last until July, what if the effect is good?

Focus on locking 25-35 year old customers

Gap has launched a 6 month survey in major cities around the world. The result of the survey is that adult consumers aged 25 to 35 years, including men and women, are stereotyped, and think they know how to shop and choose clothes. They also have higher than average purchasing power and are very interested in dressing up appropriately.

Copy its brand Old Navy mode

Gap group's brand Old Navy has a good development situation. Successful counterattack has become the most profitable group. brand Gap group said it will copy the successful operation mode of Old Navy brand to other brands. According to the group's first quarter earnings report, group net profit fell 8% to 239 million US dollars, or 0.56 US dollars per share, compared to 260 million US dollars in the same period last year, and sales fell 3% to 3 billion 660 million US dollars from 3 billion 770 million US dollars a year ago.

Replacing Chief Executive Officer

In the past 15 years, Gap has replaced 4 chief executives. The first executive officer Murphy has served Gap for 7 years, but has no way to deal with Gap business. Therefore, she hired Art Peck as the current chief executive and took office in February this year. In fact, the design and production process of Gap has started to look a bit like "C." Wonder and lifestyle brands. Pec hopes to shorten the production time through the reorganization and integration of enterprises. For this reason, C. Goldman, the former chief product officer of C. Wonder, has been excavated. Recently, Perk Sare, the chief marketing officer of UNIQLO, has been excavated. However, at the beginning of this year, C. Wonder has shut down its stores on the whole because of poor management.