Gap'S Core Brand To Retire From The "Second Line" Is Not Easy To Turn Over

When Art Peck mentioned brand operation, he emphasized that "there is nothing to do with product design and quality".

But experts give different judgements.

GAP, the US apparel group, has always regarded the Chinese market as a breakthrough point, opening flagship stores and testing water make-up, but failed to reverse the overall development of the group.

Recently, GAP group CEO Art Peck, on the initiative of the shareholders' meeting, acknowledged the problem of brand operation. It will close 200 stores this year, of which the core brand GAP sales recovery is slow. Instead, its subsidiary brand Old Navy will add 60 stores.

Experts in the field of fashion believe that the GAP brand is aging, and it is late in the Chinese market, so it is difficult to compete with ZARA, H&M and other brands.

Core brand retire to "second line"

GAP, as the core brand of the group, has lagged behind in recent years. Instead, it is the engine of the Old Navy sub brand of the group.

GAP group's latest 2017 fiscal year data show that GAP brand sales decreased by 2.5% to 5 billion 318 million US dollars compared with the same period last year, while Banana Republic sales fell 3.6% to 2 billion 380 million US dollars, while Old Navy sales increased 6.2% to 7 billion 238 million US dollars over the same period last year.

Old Navy contributed far more than GAP.

From the same store sales performance, the data of the above 3 brands are -1%, -2% and 6% respectively.

Only Old Navy is positive growth.

In the US market, sales of Old Navy and GAP 2017 in the fiscal year are $6 billion 570 million and $3 billion 70 million, respectively. The former is two times the latter.

Visible, the core brand GAP has retired from the "second line".

In response, Art Peck said the group will accelerate its restructuring of its brand business in 2018.

In fact, GAP and Banana Republic have been withdrawing from some markets.

As of the end of fiscal year 2017, the group had 3594 stores worldwide, with a net decrease of 65 year-on-year.

Asia's "salvation" failure

In order to get out of the mire of achievement as soon as possible, GAP group frequently layout the Chinese market.

In July 2017, GAP and WeChat jointly launched a series of joint designs. In August of the same year, they opened the largest flagship store in Shanghai, and set up mobile phone filling stations, children's playground and LED model fitting screen to attract young people. In September, Hangzhou opened the first independent children's clothing store in China, and launched the GAP Fit sports series to improve the product structure.

However, a series of moves did not keep Asia's performance, including China, growing.

In fiscal year 2017, Asian sales fell 18.2% to $1 billion 263 million.

From the first quarter to fourth quarter, Asian market sales increased by -20.5%, -23.2%, -17% and -13% respectively.

Asia as the second largest market of GAP group

Sales accounted for about 8%, while the North American market accounted for about 80%.

Industry analysts believe that even though the GAP group is making efforts in the Asian market, the market size of the disparate market can not drive the whole group, and the performance of the Asian market is not satisfactory.

The Beijing Commercial Daily reporter saw in GAP China's official website that at present, only two brands of GAP and Old Navy have entered the Chinese market, and have opened Tmall flagship store and official website online shopping function.

Reporters visited Baidu map found that GAP brand in China has 203 stores, Old Navy has only 20 stores.

The only Banana Republic store in Beijing has been closed.

Aging is not easy to turn around.

When Art Peck mentioned brand operation, he emphasized that "there is nothing to do with product design and quality".

But experts give different judgements.

Yang Dayun, a well-known fashion industry investor and excellent Italian CEO, said that the GAP brand has been seriously aging and difficult to attract young consumers.

GAP first became popular during World War II, when American young people

Preference forms brand style, and GAP develops rapidly.

But over the years consumer groups have changed, and brands have not changed.

In addition, GAP group wants to take China as a growth point, but did not realize that it is too late to enter the market. The market has long been H&M, ZARA and so on.

Brand is divided into food.

At the same time, GAP is lagging behind in terms of opening speed, layout scale and operation strategy.

As the first generation fast fashion brand in the world, the GAP group gradually shrinks in the US market, which is bound to affect the reputation and development of other markets including China.

Yang also said that the saturation of the whole fast fashion industry has been increasing, but the sales growth of single brand is slowing down, and the concept of "fast fashion consumption" has been weakened gradually.

It is suggested that GAP acquire high-quality resources or try to find new growth points. Because of the greater challenges of the market environment, it will take a long time to "turn around".