Gap Inc. and its stock have hit a wall, but can the clothing retail giant pick up the pace again?
Things are not looking good for Gap, and I’ll give you three reasons why my analysis of Gap does not look pretty.
1. Gap has lots considerable amounts of market share to Limited Too, Aeropostale, and Abercrombie and Fitch. Remember all those fall into the Gap commercials of the 90’s? Well you have not seen much anymore because Gap lost its competitive edge. These three competitors are growing fast, and Gap has not made much of an effort to retain customers and fight back.
2. Gap looks very unfocused and may need a CEO change. Their latest sales gimmick, Piperlime.com, offers free standard delivery and returns on all shoe products. I thought Gap was losing customers in retail clothing market, so where did this shoe idea come from? It is not a necessary move because Zappo has already entered the market. Besides with 60-day guarantees, do not be surprised if customers buy shoes, wear them a few weeks, and send them back. Nope, sure would not surprise me at all.
3. Although I applaud the hiring of Dawn Robertson as new CEO of Old Navy, Gap has yet to deal with Banana Republic. J Crew is slaughtering Gap’s comparable brand quarter after quarter, and management does not look disturbed by the bloodbath. But who knows? Piperlime.com May become a hit. I did some research on Piperlime at Alexa.com traffic rankings and found that Piperlime reaches 200 million viewers, placing it just above the top 5,000 sites on the web. Not bad for a site that launched just a couple of months ago. We cannot determine yet if customers are making purchases, but they’re definitely shopping in the web store.
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