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    The Gap Slashes Stores: What Went Wrong and How They Can Fix It

    Remember when the Gap was cool?

    Neither do we. Perhaps that's why this once great retailer continues to struggle.

    The company says it plans to close about 200 stores in the U.S. by 2013, that amounts to one in every five stores in North America, in favor of expanding in international markets.

    The Gap -- owner of Old Navy and Banana Republic -- has been plagued for years by falling sales and lower profits as it's been forced to perpetually discount goods in order to move product. Same-store sales fell 4% year over year in September, the worst showing of all 23 major retailers tracked by Thomson Reuters.

    "The company targets the middle-income market, which often leaves it stuck between discounters and upscale brands," notes an article in Friday's Los Angeles Times. Howard Davidowitz, president of Davidowitz & Associates and a long-time retail industry insider, says the Gap's problems are far simpler than that. They are not selling fashion people want to own.

    There's no fundamental reason why the Gap can't succeed. "Denim is great," he says pointing to successful brands like Abercrombie & Fitch, Lucky Brand and American Eagle to name a few.

    The fundamental problem is that the Gap lacks strong fashion sense. Davidowitz blames the CEO. Glenn Murphy is a very competent executive, but lacks the experience needed to right the ship. "Fashion people win in fashion companies," Davidowitz explains in the accompanying clip. "I've never seen a numbers guy come in and be successful in a fashion company. I've never seen one example of it."

    The company not only needs to shrink the number of stores, it also needs to reduce the size of stores. "The stores are too big," Davidowitz says. "The stores are over-sized given what's going on with the internet."

    Even with all their problems, it's not too late for The Gap. Davidowitz says if they replace the CEO with a great merchandiser, all could be fixed. Many retailers have done it before. In fact, Gap did it once before when they brought in their former CEO Mickey Drexler. Then, Drexler did it again when he took the helm at J. Crew.

    "If he went back to the Gap I would put a lot of money on the Gap," notes Davidowitz.

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    2,350 comments

    • Keiya  •  7 months ago
      The retail industry is very competitive, not creative and my family and I have long abandoned the Gap for durable dependable clothing staples such as polo shirts, dress slacks, cardigans, blouses and jeans and invest in the more upscale well made brands or designer lines that can transcend many seasons and a lot of wear. Considering the recesssion, I no longer invest the majority of my disposable income in trends in apparel especially if they are over priced and poorly constructed as many of the responses note.
      I think it would be better for these retailers to combine there distributions into one storefront therefore reducing their operating costs then distribute these savings to the consumers -- me. I also think it would be beneficial to compensate and train your employees fairly so that they are motivated to provide excellent which I find is missing over all.
      Finally, the marketing distribution has changed, because people are purchasing on line and perhaps they should make an ardent attempt to captivate the social media market producing youtube videos or whatever, but for me, I hardly watch television anymore and when I do I can't recall seeing a GAP ad for the past two years. I wish GAP the best will it restructures and believe it or not, in retail companies, investors need customers first then profits will follow.
    • G I JOE  •  7 months ago
      Does the GAP cloths come from China or here in the USA? Since I have never seen a GAP I don't know the ansure. I do know that the cloths from China, India, or any other place I can't spell do not fit our bodys here in the good old USA. I am not on the upper side of the income ladder but still go out of my way to buy American so I can get the fit I expect! Stop being cheap and buy USA goods, get our jobs back!
    • Jody  •  7 months ago
      This article is right -- the massive stores are overstocked with weirdly constructed and ill-fitting items. It needs to get back to the classic wardrobe staples that it once did so perfectly.
      • A Yahoo! User 7 months ago
        Weird is right. I'm a guy and I've never worn a weirder pair of jeans than in Gap. It was bizarre. Made me feel like a woman. I'll never wear a pair of jeans like that again. I miss the 90s when jeans for men were manly.
      • commonsense 7 months ago
        I agree, totally. There is so much junk out there and I am not exaggerating when I say Junk!
      • Hochelaga 7 months ago
        totally agree. they should stick to the classics. i'm a baby boomer and used to love shopping at The Gap and still would shop there if they would only offer good quality classics... jeans, shirts, pea-coats, etc.
    • Igor  •  7 months ago
      Quality at the GAP is so bad, it is more like Old Navy when that store just opened. I have GAP sweater that I bought 12 years ago and it is the same quality as the one that they make for Banana Republic now. All these companies think that cheap fabric and labor from China will make them more money and don't realize that people are not stupid and they see that the quality of the merchandise is not worth the money. Another problem is not a design but colors. Gap has the most depressing colors of them all. The only bright spot for GAP is baby Gap, but even there things don't look very promising.
      • Political_Alchemist 7 months ago
        No kidding. For the same quality, I can go to Walmart and pay half what Gap charges. At least Old Navy and Walmart don't make any pretense. You know you're getting trendy fare really cheap because it's going to come apart in a year or two.
      • Michael 7 months ago
        At least in our memory, we can remember good GAP stuff...
      • Veronica C 7 months ago
        They tried to do too much. I used to loved their sweaters and hoodies, now they are just made cheaply and they have 5 million other items in the store. They should have stuck to what they know and left the rest alone.
    • Diane H  •  7 months ago
      I have noticed a poor quality of clothing across the board! Sweaters don't keep a person warm. The material is too thin. Its the same at K-mart, Walmart, Shopko, Fashion Bug, Kohls, Sams Club, Target, Penneys. Nothing is meant to with-stand very many washings. We indeed live in a throw-away society!
      • Amy 7 months ago
        Because those stores are cheap(except Kohls)! #1 rule: Don't shop at a store where it's combined with a gorcery store, pharmacy, furniture store, etc. There are some exceptions like Macy's and JCPenny's which aren't horrible, but still.
      • DragoNate 7 months ago
        and no one wants cheap clothing..why waste money on important stuff like food or gas when you can buy a $100 shirt from some "premier" clothing store...
      • Sam 7 months ago
        They can have a fair price and still keep their quality up to a decent level. I think that Diane means low quality when she says 'cheap.' As most do.
    • Liberté, égalité, fratern ...  •  7 months ago
      Their clothing used to be made in the US some 20 odd years ago. Then they shifted the manufacturing to Mexico which still resulted in the well-known high quality jeans they're known for. However, when they insisted on making mass profits by outsourcing manufacturing to China, India, Vietnam, etc. their quality slipped terribly. Also almost simultaneously they began to market to the 20 something and younger crowd forgetting about the other generations. But their prices continued to soar. The last time I purchased Gap jeans was the aforementioned some 20 odd years ago period. One can see the tremendous difference in quality between what was made in the US/Mexico and those that are now made in either China or some Southeast Asian country. I do hope they fail as they refused to listen to people like myself who had complained about this years ago. But they insisted that profits came first. Their marketing gurus and financial analysts were too stupid to do anything to alleviate this so they need to pay the price.
      • Starr Gazer 7 months ago
        They all need to get this message. This is spot on! All this outsourcing is really hurting us, the American people, be it for clothes, cars, jobs and services. The only ones I see benefitting from outsourcing are corporations' profit margin.
      • A Yahoo! User 7 months ago
        But Gap isn't making money guys - this is the point of the article. They outsource because they can't afford both the horrendous regulations and taxes that the Democrats in Sacramento put on corporations and the horrendous benefits and demands the unions demand. It's not like they just come in and say, "Hey, let's make some sweaters today!!" It costs a fortune to run your production in California. For a primer on frustration, try running a company in California, it sucks. The laws regulate every move you make and as long as Democrats run the show in California this stuff will continue to happen because the legislature thinks the companies need California more than California needs the companies. Sorry but California needs the companies because we have like 12% - 15% unemployment. But somehow everyone likes to blame big business!! Don't see Gap executives walking away with big bonuses!!
      • Sam 7 months ago
        Yes but not all of it of course. I know someone is going to say that their old gap shirt was made in India but it doesn't mean all gap clothing was made in india back then.
    • Kimberly  •  7 months ago
      overpriced cute clothes. not the quality of the older gap clothing!
      • Be 7 months ago
        Yes, u r right. The price is too high !! sometimes I want to step in their store to shop for sales items but the price still too high for a sale price. Just like last week, I went to Banana Republic Store to look around. I saw a shirt that made from VietNam marked $35.50 and it was marked down for $6.99. The material looks so cheap for the brand name of Banana Republic.
      • Be 7 months ago
        Also, the styles, some look either under arm areas are to big or the length is too long.....
    • J. P  •  7 months ago
      It would be fantastic if Gap actually read these message boards instead of discussing the problem among themselves. Listen to what your customers are telling you.
    • Tom R  •  7 months ago
      $65 for a pair of jeans cheaply made in China? Phawk yew GAP!
    • KJ  •  7 months ago
      I tried buying an Xtra Large shirt a few years ago, and I swear it was made for a small guy who wanted a little bit of extra room. The problem isn't the number or stores or the cost or locations. The problem is the clothes. They're terrible. They don't fit your customers.
    • A Yahoo! User  •  7 months ago
      I am not fond of "nightclub" stores where the music is louder than what I play on my home stereo - Call me old but I have money I would like to spend...
    • Terry  •  7 months ago
      I remember when they sold Levis. I was always in there. Now I am not interested.
    • pret  •  7 months ago
      the fabric now is utter crap. They make everything cheaper the quality is got and the fabric is see through. They think we wouldn't notice how thin the fabric became?
      plus I'm sick of buying form china gap get it for a dollar a shirt and were suppose to get excited when it goes on sale for 9.99

      online they are way over priced they are trying too hard to bend all the companies together (j.crew, banana republic) they're trying to hard to go overpriced and give crappier clothes.

      i thought it was just me that stopped shopping there. I use to go all the time but in past 3 years their clothing line fashion wise has just been a mess.
    • Agitated American  •  7 months ago
      Cheap imports bad dye wash twice throw in trash
    • Dmole  •  7 months ago
      Well for one thing... the female mannequins are wearing a size 00!!! Know your customers GAP.
    • Cherry  •  7 months ago
      Everything is made in China. EVERYTHING! We need some industry in the USA. Make clothes here and make them well.
    • Daydreams  •  7 months ago
      Why i no longer shop there is because the advertise mostly to skinny people that no longer exist they dont target the normal people out there.
    • acdcrcks  •  7 months ago
      They make garbage clothes made cheap in other countries and then sell them for outrageous prices.
    • Mandy  •  7 months ago
      This is a question for the women on this post. Is it just me or do most of the blouses/tops these days look like maternity wear?
    • Phantom  •  7 months ago
      Made in CHINA, that's how!

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