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GAP to “skinny down” stores as CEO faces the music Thursday, 10th March 2011
Gap has put together a manifesto to turnaround its North American operations.
Last year may have been the first time since 2003 that Gap broke even, but chairman and chief executive Glenn Murphy is refusing to rest on his laurels. In a statement on Wednesday at the Bank of America Merrill Lynch 2011 Consumer Conference Murphy listed three points of a new strategy to turnaround the chain that is becoming increasingly isolated in the unfavourable middle market of retail.
According to Murphy Gap will be prioritising new customers where their market share is too low. This is predominantly African- , Asian- and Hispanic-Americans. They’re also going to be ‘maximising’ their pipeline, essentially doing what Gap does best, the products that ‘make sense’ to the label, and focusing on how to make their brand relevant to a younger audience.
Most importantly, Gap will be closing 200 stores by 2013, in a move that will be simultaneously “skinnying down” their other Banana Republic and Old Navy stores. Murphy stated “[Gap Inc] are in too many malls because there are too many malls.”
By cutting back on their domestic output, Gap are hoping their international and online operations will eventually represent 30 per cent of total revenues by 2013. Murphy closed the talk by stating that although Gap was make into profit making, “We’re still not happy. There isn’t a day that goes by that we don’t turn over a rock and find opportunity.”