Gap Adjustment Strategy, Force Brand, Lack Of Brand Characteristics Still Unsolved

We plan to invest more resources in the growing sub brands while cutting off the part that no longer makes money, even if it means that its core brand will be hit.

The San Francisco based company announced on Wednesday that in the next three years, they intend to close 200 stores of Gap and Banana Republic, and open 270 new Old Navy and Athleta.

However, they did not disclose each.

How many stores will increase or decrease, and which stores will be affected.

CEO Art Peck, who took office in 2015, said in a statement that in the past 2 years, they have spent a lot of efforts to adjust the whole group's "how to operate", and will focus on "how to grow" in the future.

Old Navy and Athleta are considered to be more worth investing in the two sub brands.

Old Navy has achieved 8% sales growth over the past year, while Athleta's sports products also have two digit growth.

According to Peck estimates, the sales volume of the two brands in the next 3 years will exceed 10 billion and 1 billion US dollars respectively.

By contrast, comparable sales of mainline brand Gap have not increased for 14 consecutive quarters, while sales of Banana Republic have been declining for 10 consecutive quarters.

Another growth point is online channels.

Last quarter, Gap group's online and mobile terminal business achieved double-digit growth.

They are trying to launch more online ordering and offline pick-up services in more markets.

Brand Baby Gap tests clothing ordering service.

Like A&F, J.Crew and other department store brands, Gap needs to find its consumers again.

People's spending on clothing is decreasing, and they are more willing to buy discounted goods or order online, making the flow of traditional department stores decreasing.

In order to adjust the cost structure, Gap has closed 650 stores since 2005, and the total retail area has decreased by 5 million square feet (about 46.4 million square meters).

In addition, it also tests smaller stores in the existing 3600 outlets and distributors' retail outlets, hoping to save us $500 million over the next 3 years to invest in new growth plans.

But these strategies can not solve the fundamental problem faced by Gap - the lack of characteristics of the main line brand.

In 90s, Gap was synonymous with "effortless cool".

CEO Martin McNulty McNulty of Forward3D, a digital marketing agency, remembers that at that time, many celebrities were photographed by TV.

The message is clear: sports, cowboys, street, leisure...

Gap can represent all styles related to cool.

But soon, subdivision of brands came from behind.

Trying to represent everything means losing everything.

"Even though Gap has successfully cut out the product lines of casual wear (out-of-office wear) and low-priced garments by subcontracting Banana Republic and Old Navy", the success of these sub brands only reflects the gradual decline of the Gap brand.

Martin McNulty told Adweek.

In 2014, Gap came to W+K, a well-known advertising agency, to shoot an advertisement with the theme of "Dress Normal".

Although David Fincher and Sofia Coppola director, Elisabeth Moss and Anjelica Huston are invited to starring, the new marketing has not yet had any positive impact on sales.

The reason is the same. In the US market, the 85 million millennial generation has become the main consumer force.

Compared with the 40 million X generation of Gap in 90s, their tastes are more subdivided, diversified and personalized. You can't try to please everyone.

After Art Peck took office in 2015, he directly cancelled the position of creative director.

The design process begins to be centralised, and different teams even collaborate with external third parties to design.

Peck also encourages Group executives to focus more on data accumulation to understand what consumers really want.

Indeed, as a high street brand, Gap has failed to find any unique features in design over the past few years, no matter how many creative directors have been replaced.

But the problem should not be entirely attributed to the ability of the creative director, but whether Gap as a clothing enterprise has paid enough attention to the design.

Take Spain's fast fashion brand Zara as an example, CEO Pablo Isla, Inditex of its parent group, told Bloomberg. "We can adjust the data in season in a timely manner, but in the final analysis, we provide consumers with fashion."

If there is no sense of design, we are nothing. "

In 2012, the Rebekka Bay, which is responsible for H&M's brand COS, joined Gap and failed to bring about any changes as expected.

When Bay left office, he was very disappointed: "Gap is not a design led company.

I have little discretion in what clothes will eventually be sold in stores. "

This year, the biggest highlight of Gap's product innovation is the introduction of shaping jeans and sports pants series "Sculpt".

From a technical perspective, however, it is still more powerful in marketing. The material of Sculpt series is made up of 88% cotton, 9% polyester fiber and 3% elastic fiber.

This hybrid material is not uncommon.

In this sense, whether the new round of strategic adjustment is effective or not, Gap at least needs to figure out exactly what its core assets are and what its design characteristics are.

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