Market Value Evaporated 28 Billion, 80 Thousand Employees Were Paid Off! Is GAP Cool?

Who will be the next fast fashion brand?

Due to the impact of the epidemic, as the largest and third of the world's largest enterprises, GAP, the fast fashion giant of the United States, has heard the news that it is about to go bankrupt. Not only did they have no money to pay rent, but also 80 thousand employees were not paid, they could only be forced to take a vacation.

But brother Dao is not surprised. In recent years, the days of GAP have been a bit difficult, and sales have been declining for seventh consecutive quarters.

According to official data from GAP, sales in the first quarter of 2020 will be about $100 million. Along with the decline in performance, there is stock price. Since the peak of market value in 2013, 21 billion 100 million has been falling down. Since February this year, the stock price of GAP has fallen by 60% this year, and the market value evaporates about 4 billion US dollars (about 28 billion yuan).

Can GAP still afford it?

1., from national brands to discount stores.

In 1969, an American couple opened GAP's first store in San Francisco.

GAP three letters were taken from the popular word "Generation Gap" (generation gap). The founder wanted to use the jeans and casual clothes that everyone could wear to set up a bridge between the rebellious young people and their old parents and two generations.

At that time, the style of GAP was simple, relaxed, easy to handle, well matched, and the age level was not clear. Young people went to buy T-Shirts, and the old ladies went to buy sweaters.

This also laid the GAP's product advantage by winning the basic funds.

When Zara and UNIQLO do not know where they are, it has enlightened the fashion concepts of the 70 and the post-80s, and you are the best in the street when you wear GAP.

Not only did Hollywood actress Shharon Stone wear GAP to attend the Oscar prize presentation ceremony.

Even Obama used to take his children to GAP to sweep the goods.

This is the right thing to buy, the president or the president's wife.

GAP not only sells hot, but also has a high status.

Abroad, it is UNIQLO, IKEA, Muji master, and is the master of Giordano and Baleno in China.

In 1986, GAP broke the "shopping mall" thinking of some similar department stores in the past, and pioneered the SPA mode of laying a foundation for GAP.

This form removes all distributors and directly connects manufacturers and users directly. In this way, manufacturers can directly understand consumer information, enhance the speed of supply chain reaction, and quickly return the funds.

Later, UNIQLO and IKEA were developed under the inspiration of GAP's SPA mode.

By 90s, Gap had become the largest clothing retailer in the world.

It bought Banana Republic (Banana Republic), expanded the market to Asia and Europe, and launched a cheaper brand Old Navy (Old Navy).

Out of more than 3600 stores in more than 90 countries, the annual turnover is over 13 billion, and the market value has reached about US $40 billion.

GAP's product structure, style and shop display mode are also imitated by many latecomers, including Giordano and Baleno, which are familiar with Chinese people in the early years. Besides, there are also UNIQLO stores.

However, in just a few years, the invincible garment industry leader encountered unprecedented crisis.

Since 2000, GAP and fashion are out of touch.

In the crisis, GAP wanted to catch up with the new generation of young people, and began to make short blouses and bright pink trousers. Even the hoodies and tight sweaters, miniskirts and doll dress, and even specially introduced the leather pants production line.

But no one bought it.

Nowadays, GAP can only rely on no bottom line discount to attract customers. It has changed from the popular brand of national brand to the "discount market".

During the epidemic, it was crazy to survive. Now, on the US official website of Gap, all products are on sale, with a maximum discount of 75% off.

A hat with an original price of 24.95 dollars will only cost 9.99 dollars after the discount.

What made GAP suddenly fall behind?

2. embarrassed GAP, did the wrong 3 things.

Freezing is not a cold day.

As the first leader of fast fashion, Gap is catching up with the rising brands like UNIQLO, H&M and ZARA.

At present, the fast fashion brands accepted by domestic users are ZARA and UNIQLO, followed by H&M. Compared with these brands, where is the GAP difference?

It's a great substitute.

1. Entering the Chinese market is the latest.

In the early days, the development strategy of Gap was mainly cultivated in the North American market, and the global expansion was lagging behind.

In 1987, GAP, which had been established for nearly 20 years, began to internationalize. It first entered Britain, then entered Canada, France and other countries.

It was not until 1995 that Gap began to lay out the Asian market.

Japan was once the first stop of GAP expansion in Asia, but it was blocked by Japanese local businesses, UNIQLO.

Like many brands, when global performance is sluggish, it begins to bite the fat of the Chinese market.

In 2010, GAP entered the Chinese market. As a result, the enemy was narrow, and GAP encountered another old rival, UNIQLO.

Compared with UNIQLO, H&M and ZARA, GAP has entered the Chinese market for 3-8 years, and the scale of the store has been thrown out of several streets by the front three, and has already taken the lead in establishing a higher brand awareness in the consumer group.

2, H&M and ZARA soil

Fashion is fast and fast. Although H&M and ZARA are often criticized for their poor clothing quality, they are faster than fashion models.

Zara the fastest process is 20 days from the design, production and delivery to the store.

In this process, for design alone, an average of 20 minutes is designed for a garment, and more than 25 thousand new designs can be designed each year.

But Gap has no own factory, and the cycle from design to store is 10 months, which is about 3~5 times that of ZARA and H&M. As a fast fashion brand, such a long product cycle is clearly unable to compete with its competitors.

Some netizens "Tucao" GAP:

I can't afford it when I'm a student.

Although it is a ridicule, it exposes the embarrassment of GAP in China more or less: fashion can not catch up with H&M and ZARA.

A fashion blogger in New York said:

"When you know a few days, the brand has at least thirty percent off or even half off discount, so you don't want to buy this product at full price. There was no loss in a few days. "

For GAP, this is a terrible vicious circle.

3, more than UNIQLO boring

If you only talk about the quality of materials, GAP products are better than ZARA and H&M, but the problem is that it is boring than UNIQLO.

The simplest style, the most basic jeans and the big Logo jacket, GAP has remained unchanged for decades.

And UNIQLO, who also does the basic payment, is obviously more user friendly than GAP, and has been working with artists and big brands all the time.

What is it for?

Want to use cheap products to support every ordinary person's face.

In addition, GAP has been lacking in localization and differentiation in China, that is, it has not been separated from some local brands, and the American style of design is not very suitable for Asian people. Therefore, it is only an international brand symbol to develop into the user's mind now.

Over time, there was a situation:

If you want to buy the foundation, you will go to UNIQLO. If you want to buy a better one, you will go to ZARA. If you want to buy cheap, you can go to H&M. What can GAP give you?

GAP's taboo is the lack of a memorable point in the minds of users.

3. is the fast fashion day coming to an end?

High-end design, civilian prices, fast fashion in the past ten years have not met the opponent can beat. But in the ten years running fast, the fashion industry obviously failed.

In December 2018, the British brand New Look, which threatened to open 500 branches, officially withdrew from the Chinese market.

In April 2019, Forever 21 announced its withdrawal from the Chinese market.

6 months later, Forever 21 filed for bankruptcy and withdrew from stores in China, Japan and other markets.

1 months later, the Gap group announced that the Old Navy (the Old Navy) will be withdrawn from the Chinese market in 2020.

Under the situation of "fast fashion" brand of foreign capital, the Chinese disciples were miserable, and they met Waterloo earlier.

We are familiar with Metersbonwe, which used to play a big role in the north and south of the big river, and its performance was in a doldrums: "Duan wood took me to Metersbonwe today."

There is a negative growth in the offline industry of Semir.

La Natsu Bell, the Chinese version of "ZARA", lost 500 million and 2400 stores last year.

Why are the fast fashion groups unable to move together?

1, the product is not acceptable.

A few years ago, we mentioned that some fast fashion brands always think of words such as fashion, fashion and top grade.

High cost performance is an important reason why fast fashion brands are popular among people, and can also wear fashionable sense.

But in view of today's fast fashion products, GAP's new style is not creative.

And ZARA copied it from morning till night.

Moreover, it is for fast production, ignoring quality: the fabric is getting worse and worse, the work is becoming more and more rough, and the design is becoming more and more ugly.

ZARA was the 7 time in the 2 years after entering China, because of the quality inspection problem. It includes various problems such as pH value, formaldehyde content exceeding standard, cashmere content and color fastness.

These fast fashion people are no doubt digging their own grave.

2, user experience is very poor.

Fast fashion people seek fast, ignore the essence of the product at the same time, also ignore the service.

Many netizens reflect customer service does not deal with the problem at all, the attitude is not good, want to return seven or eight months can not find customer service.

3, ignoring users

In the fast fashion recession, the "user change" may be the root cause.

With the upgrading of consumption, many people have abandoned those fast fashion consumables which are of poor quality and can only wear one season.

In addition, now users are no longer blindly pursuing foreign brands, more attention to domestic products, from the rise of domestic goods such as Lining in recent years can be seen.

These fast fashion make Chinese money, but the attitude is extremely arrogant. ZARA app once referred to Taiwan, Hongkong, Macao and Tibet as countries.

Ignoring users is the biggest arrogance, and these arrogant fast fads are at the end of their days.

Arrogance is the first stage for enterprises to decline.