Gap Performance Rebound Old Navy Best Performance

The bad business of Gap seems to be getting warmer. According to the 2017 first quarter financial report, the group's net income reached 143 million dollars, achieving a 12.6% growth.

After the release of the earnings report,

The share price increased by 4.5% to $24.24 per share before last Friday's closing.

This is the second good news that Gap received this year. In January, sales of Gap increased by 2% compared to the same month last month, and before that, the group's revenue data fell for 7 consecutive quarters.

In the group,

Once again become the best performing brand.

In addition, sportswear brand Athleta ranked second.

According to the world clothing and shoe net, sales of Old Navy increased by 8 percentage points, while the other two owners of the group.

Sales of Gap and Banana Republic declined by 4%.

In the conference call, Gap Group Chairman and chief executive officer Art Peck pointed out: "we are glad that this quarter has positive gains and growth. We have made substantial improvements in product quality, and are also improving the capacity to respond to the trend and market demand."

Just because the retail environment is still challenging, Gap group plans to concentrate its efforts on product and consumer services to encourage long-term development.

Analysts pointed out that the downward trend of Gap slowly slowed down after October 2016.

What is unexpected is that after the national day last year, the share price of the company that almost missed was suddenly increased by 15.3%.

Wall Street noted that this is the result of increased market demand for Old Navy.

Looking at Gap's earnings report, it will be found that the "Old Navy" has been strong in the past five years, which is closely related to the leadership of Stefan Larsson. Larsson served in H&M for 15 years. After joining Gap in 2012, it immediately helped Old Navy achieve a profit growth of three consecutive years.

Gap is also learning Old Navy to actively narrow the gap with family consumers.

In the Gap group, Old Navy has always been a relatively low operating cost brand, but it has been able to gain sales growth in the past five quarters.

Compared with the previous quarter, the brand's same store sales increased by 2%.

In recent years, Gap has also tried to find some secrets of success from well performing Old Navy.

In 2015, Gap claimed that it was necessary to copy the operation mode of Old Navy into other brands of the group.

The Group believes that the success of Old Navy is because it has a clear brand strategy, which is dominated by the California wind, the price is cheaper than Gap, and the product line is targeted at family customers. Apart from the young people aged 25 or so, they also encourage their grandmothers, mothers and children to come and buy them.

It is this positioning that made Old Navy a good achievement during the recent Easter holidays.

In Beijing Yau Tang shopping center, Old Navy has created a family oriented shopping experience. There are playgames and children's playgrounds in the children's wear area on the two floor to facilitate the elderly to play with their children.

Old Navy hopes to keep customers in the store for longer.

In order to match holiday marketing, Old Navy usually chooses the store address in the mature business circle, and there are complete supporting facilities around it, so that the whole family can enjoy a full day of shopping, eating and playing.

Banana Republic from the product line, Gap has two years of learning Old Navy traces, it launched a variety of children's wear joint name, and children's clothing has become the most profitable category of Gap brand.

On the other side, it is actively learning from another brand Athleta of the group, and has launched the Gapfit sportswear to support the situation.

At the earnings conference, Peck saw Athleta as an unexpected joy. It was clear that the company did not have high hopes on sportswear.

On the contrary, Gap and Banana Republic, which have spent much effort in recent years, have not been effective.

Since 2015, Gap group has started betting on the more fashionable products and e-commerce business on Gap. Peck has also hired Wendi Goldman, the former chief executive of Victoria, to focus on solving the problem of too little color and incomplete size of consumer feedback, but since the product positioning is too vague and lacking in characteristics, consumers have not yet felt the sincerity of so many innovative products.

However, in the Chinese area, Gap invited small red deer to make advertisements to attract young customers to take out their wallets. However, a large discount strategy is still hurting brand value. This paradoxical strategy seems to be counteracting each other, leading to many young people still unable to get interested in Gap.

In the face of the persistent downturn of Gap and Banana Republic, Peck's response is equivocal. He has not promised to see the turning point. At least in the current poor retail environment of the United States, people will witness more brands' layoffs, layoffs and bankruptcies. But Peck still believes that the market still has many opportunities. In short, the pformation can not stop.

At this stage, Old Navy will surely support the Gap group alone for a long time.

Recently, it opened a 8000 square foot store in Walnut Creek of California. The layout of the whole shop will show a small prototype of the future store, but the group has not made specific instructions on what to store for the future.

At present, the priority of the group business is constant, and the quality of the product is still updated and improved.

In particular, women who suffer badly are the most difficult part of reform, but once they are successful, they are also most likely to play the role of sales leader.

More interesting reports, please pay attention to the world clothing shoes and hats net.