ANF) and the Gap (GPS) are facing extinction. A Spanish company called Inditex (ITX.MC) is already the world’s biggest fashion retailer and it hasn’t even bothered to attack the U.S. market in earnest. When it does it’s game over for American specialty retail as we know it.
Gap and Abercrombie are the old school. They strive to be on the cutting edge with a fickle youth audience. They order goods months in advance, much as U.S. retailers have been doing since the ‘80s. That means big profits when they’re in sync with the customer, but catastrophe when they miss. Clothes are racked and stuffed in cubes and marked down until the bitter end. Finding an entire rack of clothes marked down 40% with no sizes larger than “medium” isn’t just possible, but par for the course.
When Abercrombie came under fire for not selling anything marked “XL” for women the chain vowed to expand sizes in limited quantities in one