After Tough Times, Gap Announces New Stores
After a long period of restructuring, Gap Inc., often described as the world’s largest specialty retailer, is charting a course for growth.
At the Sept. 6 Goldman Sachs 24th Annual Global Retailing Conference, the San Francisco–headquartered retailer announced that it would open more physical stores and continue to build its online and digital retail, said Art Peck, Gap’s president and chief executive officer.
“Over the past two years we’ve made significant progress evolving how we operate—starting with getting great product into the hands of our customers more consistently and faster than ever before,” Peck said in a statement. “With much of this foundation in place, we’re now shifting our focus to growth. We will leverage our iconic brands and significant scale to deliver growth by shifting to where our customers are shopping—online, value and active.”
Over the next three years, the company expects to open 70 new stores. A lot of growth will be driven by its Old Navy and its Athleta brands. In a company statement, Gap Inc. forecast that in the next few years Old Navy would exceed $10 billion in net sales and Athleta will exceed more than $1 billion in net sales.
The growth will be fueled in part by those brands’ online and mobile channels and expansion of physical stores in the U.S.
Gap Inc. also is scheduled to close 200 of its Gap namesake stores and Banana Republic locations that have been underperforming.
Also over the next three years Gap Inc. will increase its investment in online and digital retail. Investment will be focused on areas such as direct fulfillment capacity, personalization, omni-channel services, artificial intelligence and various data-driven consumer experiences.
For the second quarter of fiscal year 2017, which was released Aug. 26, same-store sales increased 1 percent compared with a 2 percent decrease for the second quarter of 2016, according to financial documents. It was a third consecutive quarter of sales growth. Net sales for the second quarter decreased 1 percent in a year-over-year comparison. Net sales were $3.8 billion for the quarter.