Gap Brand Still Faces Challenges

Largest in the US

Retailers Gap group's performance has gradually recovered, but its core brand.

But still faces challenges.

According to the world clothing and shoe net, in the fourth quarter ended February 3rd, Gap Group sales increased 7.9% to 47.8 billion US dollars, and same store sales increased 5%.

1.7% of the forecast, net profit fell by 6.8% to 205 million dollars from the US tax reform.

Among them, the group core brand Gap sales were basically flat compared with the same period last year, while comparable sales of Old Navy and Banana Republic recorded an increase of 9% and 1% respectively.

In the 2017 fiscal year, Gap group's net profit rose 25.4% to $848 million, and sales increased by 2.2% to $15 billion 860 million.

The picture shows the Gap group's main performance data for the fourth quarter of last year.

By brand:

Gap year-on-year sales decreased by 2.5% to US $5 billion 318 million compared with the previous quarter, while the fourth quarter revenue recorded an increase of 1.7% to US $1 billion 606 million.

Old Navy year-on-year sales rose 6.2% to $7 billion 238 million compared to the same period, and the income in the fourth quarter rose 12.6% to 2 billion 160 million dollars.

Banana Republic year-on-year sales fell 3.6% to 2 billion 380 million U.S. dollars, fourth quarter revenue grew 2.6% to 727 million U.S. dollars.

By Region:

The United States remains the main market for Gap group. Last year, sales in the region rose 4.8% to $12 billion 568 million, or 80% of total sales.

Sales in Canada rose 8.2% to $1 billion 173 million, or 7% of total sales.

Asia, including China, has become the second largest market in the Gap group after the US, but last year sales fell 18.2% to 1 billion 263 million US dollars, accounting for 8% of the total sales.

European market sales fell 6.9% to 641 million US dollars, or 4% of total sales.

Sales in other parts of the world were basically flat compared with the same period last year, accounting for 210 million US dollars, accounting for 1% of total sales.

As of the end of the reporting period, Gap group had 3594 stores in the world. In the fourth quarter, the group added 56 new stores, but closed 101 stores and closed 55 stores.

For the four consecutive quarter of last year's growth in group sales, Art Peck, the group's chief executive, said it was mainly due to the positive performance of its brands during the holiday season. Old Navy has become one of the fastest growing US apparel brands, not only because of the product itself, but also because of its clear brand image and clear positioning.

At the same time, Gap group realized that its core brand Gap has lagged behind in its development. As a former sales leader of the fashion industry, Gap has been rated by Forbes as one of the ten fashion brands that may disappear in the next ten years.

In order to let Gap get out of the mire of achievement as soon as possible, the group announced at the beginning of this month that the brand CEO Jeff Kirwan will be leaving, and its position will be temporarily represented by Gap Hyder executive vice president and global talent and sustainable development director Brent Hyder.

Art Peck has revealed that Gap brands will close hundreds of stores in the coming year.

In view of the fact that Asia has become the second largest market in the Gap group after the US, Gap regards China as one of its breakthroughs, trying to further open up online and offline competition with other fast fashion brands and e-commerce providers for young consumers.

In July last year, Gap launched a series of joint designs with China's social app WeChat, which aims to narrow the distance between the brand and nearly 1 billion active users behind WeChat.

In terms of products, Gap is also making some efforts, such as launching the GapFit sports series, focusing on the fashion of products, and strengthening tannin products which are more popular with consumers.

The picture shows Gap's largest flagship store in Shanghai, with pictures from micro-blog official micro-blog.

In August 25th of that year, Gap, the largest flagship store in China, opened in Nanjing West Road. The flagship store on the two floor included men's and women's clothing on the first floor, children's clothing on the two floor and the "gap body" home series.

Throughout this new flagship store, Gap can be seen everywhere, including mobile phone filling stations and children's amusement parks.

In terms of digitalization, flagship stores have electronic Touchscreens and LED model fitting screens for consumers to get inspiration and look for specific products.

However, since the beginning of last year, the global retail giant, which constantly increased the fashion industry, has launched two new jeans brands, Hale and Denim Crush.

Some analysts pointed out that Amason's jeans brand launched or had a certain impact on the market share of Gap and Nordstrom's women's clothing.

It is noteworthy that Gap has never positioned itself in fast fashion, but in the rapidly developing apparel retailing industry, Gap has gradually been placed in the same camp as Zara and other fast fashion brands, and consumers have raised expectations for the Gap supply cycle.

In this case, Gap also put the supply chain problem on the agenda of reorganization.

Art Peck stressed that the restructuring measures of the group are progressing smoothly, and the efficiency of the supply chain will be improved in the future to meet the changing needs of consumers, so that the company can compete better with fast fashion retailers.

UNIQLO, which is more similar to Gap, announced earlier that it would further shorten the product cycle and move towards fast fashion.

For Banana Republic, which also closed its stores and started restructuring since then last year, the group announced earlier that the New York headquarters with 112 employees will move to San Francisco and new design centers will be set up, and some of its employees will be affected.

Gap spokesman said the move was aimed at improving the long-term sluggish performance of Banana Republic.

Art Peck finally revealed in the earnings report that the group will accelerate its restructuring of its brand business in 2018, plans to open 25 new Old Navy outlets, and will continue to shut down Gap and Banana Republic's poor performing stores.

Teri List-Stoll List-Stoll, chief financial officer of Gap group, said that in addition to continuously improving its brand productivity and increasing investment, the latest tax reform bill proposed by the United States will have a positive impact on the future profitability of the group.

After the release of the earnings report, Gap group rose 9.43% to $34.69 a share yesterday, and its market capitalization was about $12 billion 300 million.

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