The Three Big Brands Are Collectively Weak, Gap Finally Choose To Accept Amazon.

Gap Inc., the three biggest brand, has been driven to a dead end, so the Group CEO Art Peck said at the annual shareholders' meeting on Tuesday May 17th that the group might consider entering Amazon to seek the final hope of recovery.

As we all know, although Amazon is the largest electricity supplier in the world, it has a strong position and voice, but since its establishment, it has been difficult to capture the US brand as a third party platform. This contrasts sharply with its rival Alibaba in China.

As electricity business started earlier, the United States was large.

Basically have their own online channels, in order to avoid passivity has always rejected Amazon's olive branch, only PHV Corp. and a few large retailers and Amazon have deep cooperation, PHV Corp.'s Calvin Klein, Tommy Hilfiger two brands will be Amazon as a third party sales platform.

In February 2015, the new Art Peck was given the task of revitalizing the largest clothing group in the United States. Unlike many of its predecessors from the traditional retail sector, Art Peck was the first CEO of Gap to come from the digital and consulting field. Before joining Gap Inc., he served in Boston consulting company.

However, during the 16 months' term of Art Peck, he not only failed to lead Gap Inc. to resume, instead, in the past two quarters, the group's only hope brand Old Navy also began to plummet, and the trend was extremely fierce, while Old Navy lost its meritorious president, Stefan Larsson, in October 2015.

At the shareholders' meeting on Tuesday, Art Peck said that from his point of view, it is impossible to not consider Amazon and other channels at present.

He said the group has been considering opportunities outside traditional stores and beyond channels.

Last Tuesday, Gap Inc. released another disappointing quarterly and monthly sales.

In the first quarter of April 30, 2016, Gap Inc.'s same store sales fell 5%, and the market forecast fell 2.6%.

Net sales fell from $3 billion 660 million in the same period last year to US $3 billion 440 million, less than US $3 billion 540 million in market expectations, a decline of 6%, and has been retrogressive for fifth consecutive quarters.

In addition, the Group expects the EPS for the first quarter to be 0.31-0.32 dollars, and only the market expectation of 0.44 US dollars is less than 3/4.

In March, the group warned that entering the stock market in anticipation of April meant an increase in discount promotions, which is expected to generate pressure on gross profit margins in the first quarter.

Art Peck has repeatedly released the Gap brand and the Republic of banana can start the recovery signal in the spring, but now there is no sign of recovery, but also because Old Navy performance is worse than before.

Group spokesman pointed out that involvement in the cooling of the economy led to clothing.

For many reasons such as the downturn, group business is turning slower than expected.

In addition, the sales figures released in April by Gap Inc. show that the group's crisis has intensified, especially the Old Navy Old Navy brand, which is the biggest source of revenue, which has been deteriorating.

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According to the data, Old Navy4 sales in the same month fell 10%, a sharp decline from 6% in March, which is far from the 2.6% growth of market expectations.

Last year, when Gap's brand and Banana Republic began to decline, Old Navy still played a strong role in engine growth. Therefore, the group has been focusing on the top two brands. Old Navy suddenly lost its former CEO Stefan Larsson last October.

In mid last month, the group has found a new brand president for Old Navy. She is Sonia Syngal, vice president of global supply chain and product operation, who has served the group for 12 years.

In April, sales of Gap brand and Banana Republic declined narrowly, from 6% and 14% in March to 4% and 7% respectively, compared with the same period last year, and the two brands also made progress.

Overall sales of Gap Inc. fell 7% in April, far less than Retail Metrics's combined growth of 1.1%.

Net sales of $1 billion 120 million, an annual decrease of 7.4%.

In contrast, Amazon, the e-commerce giant, is developing its own brand, which includes fashion categories, and a number of market organizations believe Amazon has become the largest apparel retailer in the US in 2017.

In July 2015, investment bank Cowen&Co. reported that the e-commerce company expects to surpass Messi general store group in 2017 to become the largest apparel retailer in the United States.

Cowen&Co. expects apparel business to be the main business of Amazon.com, which is estimated to account for 70% of sales, up to $16 billion in 2015 and will grow to $52 billion in 2020.

According to the bank, Messi stores occupied American Apparel and accessories in 2014.

7% share, and Amazon group followed 5% share. Messi department stores sold 28 billion 100 million dollars in 2014, of which clothing accessories category accounted for 84%.

At the end of January this year, R.W.Baird of the investment bank released a report again, saying that in the past year, the clothing giant increased by 91% to 30 million, and its growth rate was only 281% behind that of mobile phones and accessories, and 110% of household and horticultural analogues. The growth rate was third in all categories.

Amazon's increased investment in the fashion industry began in 2008, in which the Gap group's Piperlime president, Cathy Beaudoin, joined the president of the fashion department, Cathy Beaudoin joined the group fashion sector after the accession, and promoted the construction of the studio and other infrastructure.

Under the Cathy Beaudoin tie, Amazon group launched the first Fashion TV advertising, fashion brand, men's beauty brand, luxury beauty brand, first designer brand store and a series of initiatives. The company set up tens of thousands of square feet of large studios in New York to meet the shooting needs of Amazon.com. In fact, the group also has many fashion business platforms including MyHabit (founded in 2011) and Shopbop (Amazon acquired in 2006) and East Dane (2013 online).

In addition to its own business, Amazon is also the third party sales brand of Calvin Klein, Disney, Columbia, Anne Klein, Diesel, Tommy Hilfiger and Levi "s", which are billions of dollars in giant apparel retail brands.

Since Art Peck no longer denying Amazon at the shareholders' meeting, then Cathy Beaudoin, President of the fashion group of Amazon group, who served Gap group, may take the initiative to throw olive branches again to Gap Inc.. Then, Gap Inc. is going to invest in Amazon, perhaps the fact that we will soon see.