Fast fashion brand Gap is set to close all of its stores in the UK and Ireland in July, but is currently facing a row with landlords over plans to exit physical retail in the UK (and continental Europe). According to reports, Gap has offered to pay rent by July, but only at a lower interest rate. This will be a major issue for landlords currently facing historically slow rents and many tenants refusing to pay rent or looking to move to turnover-based deals.
News broke last fall that Gap was exploring the option of becoming an online-only business in Europe, although there were also suggestions that retail stores might enter into franchise deals.
In addition, Fox News reported in 2020 that the American clothing giant GAP plans to reduce stores in the North American market. It is understood that GAP has entered major shopping malls in the United States over the past few decades and has become a “frequent visitor” to these shopping malls. However, GAP Company stated that it will close 220 stores of the same name by the beginning of 2024, equivalent to approximately 33% of the total number of stores. After these stores are permanently closed, up to 80% of the remaining GAP stores will no longer be located in shopping malls.
It is reported that GAP will focus more on developing e-commerce business after closing 30% of its stores. Gap currently operates 95 stores in the UK, although these are closed due to the current lockdown. Gap recorded more than £3 million in impairment charges for underperforming stores in the year to February 2020, making it clear that Gap’s problems are not just related to the pandemic. In that financial year, Gap’s UK retail sales fell by almost 10% to 195 million pounds, with an operating loss of more than 40 million pounds.
Gap began to simplify its product configuration last year, focusing on the four major product pillars of jeans, khakis, T-shirts, sweatshirts/sweatpants, and focusing on Develop products that are of better quality than your competitors. It is reported that Gap’s children’s clothing has become a strong business in the Chinese market. The second floor of its flagship store on Nanjing West Road in Shanghai is almost entirely a children’s clothing sales area. In 2020, the brand also launched the Gap Teen series, which is mainly targeted at teenage female consumers of Generation Z, further expanding Gap’s coverage of business of all ages and genders.
When the epidemic hit the world hard in 2020, many international fast fashion brands adjusted their plans in China. For example, Inditex Group, the parent company of fast fashion brand Zara, and Spanish fast fashion brand Mango have reduced or suspended plans for offline stores and turned their attention to online. At the beginning of 2020, Gap’s brand Old Navy withdrew from the Chinese market. The brand said it would focus on the development of the North American market, but the main brand Gap is constantly refreshing its presence in the Chinese market. Currently, the Gap brand has opened nearly 220 stores in nearly 40 cities of various tiers, including Shanghai, Beijing, Shenzhen, Guangzhou, Taipei, Chengdu, Hangzhou, Nanjing, Xi’an, Wuhan, Chongqing, Sanya, Foshan, Kunshan and Huzhou, and sells them through the official website and third-party platforms such as Tmall to conduct online business. Expanding offline networks from new first- and second-tier cities, and gradually penetrating third- and fourth-tier cities, Gap’s ambition to bet on the Chinese market is so obvious.
In addition, in June last year, Gap announced a ten-year partnership with Yeezy founder Kanye West and will launch the joint clothing line Yeezy Gap in 2021. Almost at the same time, Chinese consumers discovered that Gap’s entire line of products had unknowingly made price cuts, and the price range of all products had converged with Uniqlo’s. According to the WeChat public account LADYMAX, Gap not only significantly reduces the prices of all products in China, but also simplifies the pricing of each category and streamlines the price of each product category into three levels. It is worth noting that the price reduction of Gap’s entire line of products is a price strategy only for the Chinese market, not a global strategy. According to Gap, through this price adjustment, Gap hopes to convey the latest positioning in China, a high “cost-effective” brand, and hopes to start a different new journey. </p
