1. Old Navy Global: Positive 3 percent growth compared from last year.
2. Gap Global: Negative 1 percent growth compared from last year
3. Banana Republic Global: Negative 1 percent growth compared from last year.

Net Sales Results

Net sales for the third quarter of fiscal year 2017 were $3.84 billion compared with $3.80 billion for the third quarter of fiscal year 2016. Third quarter net sales details appear in the tables . There is an increase in Net Sales by 1% from the last year however if we compare the figure of sales for the 9 months , we realized that there is decline in Net Sales i.e, from $11.08 billion to $11.07 billion . The Net Sales – Net Profit seems more encouraging as it has increased from 5% to 6%.

Revenue From Brands In Different Regions

Looking at the brand’s revenue distributions in different regions , we noticed that USA lost its share in sales for Gap Global And Banana Republic Global however For Old Navy And Other Brands increased their share in USA region. Canada performed very well in all brand segments as it didn’t lose share in sales for any brand for the Q3,2017 . Asian region is the biggest disappointment for the Q3 as in all brand segments , it lost its share substantially. Where the brands like H&M and Zara have been performing so well in Asian Market , it is strange to see the diminishing position of GAP . Probably , its mid segment placement is the problem.

Region Wise Sales

So far as the % of sales from different regions are concerned , US contributed 79% of sales which is 2% more that the last year . All the other regions excluding Asia remained constant in terms of sales in Q3 . Asia lost the share in the total sales by 2% and the reason might be the stiff competition from the rival brands like H&M.

Store Count on Beginning of Q3 and At the End Of Q3

The company ended the third quarter of fiscal year 2017 with 3,639 store locations in 46 countries, of which 3,193 were company-operated. The company now expects to close about 30 company-operated stores, net of openings and repositions.

Segments

Denim seems to be strong with particular strength in women’s denim which grew over 13% as an individual segment. Old Navy is now among top 5 value denim retailers in the US and going strong based on its product and value pricing which shows that brick and mortar stores are able to draw the consumers based on pricing. Activewear has been the strongest growth driver contributing over $1 billion in revenues. Athleta – the activwear brand of GAP – is witnessing strong growth. As per NPD, the size of Athleisure market in US is a huge $44 billion and increasing 10% each year. Hence this segment opens big opportunites for GAP and other retailers. Improved sales in Women’s denim is also a reflection of this trend as many styles of women’s denim have athleisure features.

Gap is also taking E-commerce seriously. It has been investing in developing online business and is targeting over $3 billion in sales in coming years. To this end it is trying to integrate its Offline and Online offerings with online facilities like “Reserve in Store, Pick up in store , Ship from Store ” etc. The idea is to give pure ecommerce companies a run for their money by providing dual service to the consumers .

The high street giant – GAP – is looking at innovative ways to remain in customer focus as it faces daunting challenges in sales. It is now launching an in-store* service that will allow you to customize your denim any way which you want. This means that once you have bought the jeans, you can personalize it further.

The ‘Denim Addicts ‘ service as they call it , sounds easy and customers have to take appointments at the local store where specialist advisors will assist in the customization process.

You could select for a number of decorations and embellishments including  star-shaped studs, oval patches, Union Jack pockets or silver circle studs. There’s also you have the option to get  hemmed or distressed offer, which allows you to either wait and take away your freshly hemmed jeans there and then, or pick them up the next day. The service , which takes about 20 minutes , is meant to be FREE !!

But Gap wants you back !   Every customer will receive a loyalty card in-store stamp for every pair of jeans purchased. Then, when you’ve made it to four stamps, you’ll get a free pair of jeans. FREE.

“*Participating Stores:

LONDON: Oxford Street, Oxford Circus, Regent Street, Kings Road, White City, Brompton Road, High Street Kensington, Canary Wharf, Bluewater , Brent Cross, Islington, Kingston. NORTH: Leeds, Liverpool, Manchester Trafford Centre, Manchester City. MIDLANDS: Birmingham Bullring. SOUTH: Milton Keynes, Oxford, Guildford, Stratford, Bath, Bristol Cribbs Causeway, Exeter, Brighton. IRELAND: Arnotts, Dublin, Dundrum. SCOTLAND: Edinburgh, Glasgow. WALES: Cardiff.”

Old Navy sales dropped 8 percent in the three months ending in January, down from 11 percent growth in the same quarter of the previous year, the company said . Banana Republic revenue dropped 14 percent compared with 1 percent year-over-year growth. Gap brand sales narrowed losses, to negative 3 percent from negative 6 percent, indicating some stabilization in the company’s namesake brand. Net sales in January were $813 million, down from $888 million in the same month last year.

The overall revenue of the company is almost stable with a slight increase though in 2015 increasing to $16.43 billion. However, this reflects poorly when compared with growth in companies like Uniqlo and H&M.

Net income fell from $1.28 billion to $1.24 billion showing the pressure the company is facing in its margins.

However, 2016 is more disturbing for the company and sales expected to go down further this year. As far as the January Comparable Sales Results is concerned ,Gap Inc.’s comparable sales for January 2016 were down 8 percent versus negative 3 percent last year. Comparable sales by global brand for January 2016 were as follows:

• Gap Global: negative 6 percent versus negative 9 percent last year
• Banana Republic Global: negative 17 percent versus positive 2 percent last year
• Old Navy Global: negative 6 percent versus positive 3 percent last year

• Gap Global: negative 3 percent versus negative 6 percent last year
• Banana Republic Global: negative 14 percent versus positive 1 percent last year
• Old Navy Global: negative 8 percent versus positive 11 percent last year

Gap Inc. shares reported lower year-over-year sales and its share price reached to the lowest level at $25.45 . Grim quarterly sales numbers suggest the problems facing the company’s Gap and Banana Republic outlets might be spreading to Old Navy, which had performed well through most of last year.

It seems that GAP needs to urgently revamp its sales strategies in view of competition from Fast-Retailers and changing consumer tastes. The consumers are losing their appetite for long established brands in favor of quick fashion and high quality clothing and all the established retailers need to take that into consideration.

About GAP Inc.

The Gap, Inc., commonly known as Gap Inc. or Gap, is an American multinational clothing and accessories retailer.It was founded in 1969 by Donald Fisher and Doris F. Fisher and is headquartered in San Francisco, California. The company operates five primary divisions: the namesake banner, Banana Republic, Old Navy, Intermix, and Athleta. Gap Inc. is behind Inditex Group and H&M in the total numbers of international locations. However, it remains the largest specialty retailer in the United States. As of September 2008, the company has approximately 135,000 employees and operates 3,076 stores worldwide, of which 2,551 are located in the U.S

Developed by Gap’s Global Creative Centeri n NY together with Ogilvy and Cool Hunting Gap’s 1969 studio, creating the company’s denim line, is the first to get a treatment by the company’s marketing department to highlight ‘what’s different and inventive at Gap,’ says chief marketing officer Seth Farbman.
‘We want our customers to see who’s behind the product and how their individual personalities and lifestyles influence what we offer in our stores around the globe.’

To show that Gap is not just another denim retailer but ,Gap’s new global marketing campaign tells the story of its 1969 fall collection from the inside out. Starting with the personalities behind the denim, 1969: L.A. and Beyond gives a transparent look at the designers and how they come together each day to create the latest in denim fits, fabrics and washes. Taking it from the studio to the real world, the campaign also shows how the denim comes to life in various cities by the people who wear it. All this is perhaps to give a more human and individualistic touch to their 1969 jeans .

Led by creative director Rosella Giuliani (formerly vice president of design and merchandising at Seven For All Mankind), the 1969 design team is a collective of artists, musicians, action sports junkies and trendsetters. Women’s design director, Nicole King-Burroughs, turns to art for style inspiration, while women’s merchant, Masako Konishi, views fashion as more instinct than intellect, applying emotion as opposed to regulated rules to make her fashion choices. Men’s design director, Jason Ferro, brings his background as a rebel skater, surfer and musician to the design table, while men’s merchant, Cale Margol, uses denim as a canvas to tell a modern and progressive story. Wash specialist, Rob Crews, started in the industry when he was just 16 years-old and fell in love with the creative process of taking raw denim into a washed state through different hand treatments. A series of over 30 videos gives a sneak peek into how the collection is made. Here is one of the videos :

Providing further inspiration to the design team, the 1969 studio feels like the personal atelier of a denim architect, not the headquarters of a global brand. Once a cigar factory, the vast and open loft studio is based in the heart of the garment district on West Pico Boulevard in downtown Los Angeles. This Gap denim epicenter is an ever-changing canvas for ideas, featuring art books, mood boards, vintage buttons, Japanese work wear catalogues and back issues of surfer magazines, set against a backdrop of sun-filled floor-to-ceiling bay windows.

“When I first joined Gap, I was surprised by the unexpected, untold stories across the brand—particularly about our people and the real-life experiences and situations they’re inspired by,” said Seth Farbman, Gap’s Chief Marketing Officer. “Fall is our first step in sharing what’s different and inventive at Gap, and we’re starting with our 1969 studio. We want our customers to see who’s behind the product and how their individual personalities and lifestyles influence what we offer in our stores around the globe.”

Aligned with how people want to discover and share information, 1969: L.A. and Beyond will live primarily in the digital world via a series of video vignettes and sponsored editorial on Gap’s Facebook page and on outlets such as DailyCandy, FabSugar, Glam, Hulu, LookBook, Pandora, Refinery29, RollingStone and TrendCentral. The campaign was developed in Gap’s Global Creative Center in New York, and is designed to be global with different parts of the campaign allowing international markets to balance according to their needs.

To make the campaign more lively , Gap has also launched the Pico Trucks in some cities of US where Tacos (a mexican food) and other items will be served to people who are wearing a Gap product – FREE !

1969 Fall Collection
Gap’s 1969 fall collection continues to demonstrate Gap’s commitment to bringing the same premium fabrics and fits as other premium denim brands at a much more accessible price point. Taking denim beyond the five-pocket blue jean, the fall collection explores the idea of “jeanswear meets sportswear.” It evolves the line from jeans to stretch leggings, cords, tailored dress shirts and jackets. With an emphasis on sophisticated fabrics, the collection feels modern and sexy while maintaining a denim lifestyle vibe.

The women’s signature Legging Jean is fresh for fall in a variety of new fabrics and colors, including the Ponte Knit Legging in black and olive, the Gummy Legging in black and khaki, and the Legging Cord in both neutral and pop colors. Also big for fall is the High Rise Pintuck Trouser in a non-traditional indigo denim, the Skinny Boot in black, and the fashion crop in fits such as the Cropped Slim, the High Rise Cropped Straight and the Cropped Boot.

The menswear collection is also focused on signature fits in new fabrics and colors. Highlights include the Drop Crotch Skinny in charcoal, the Slim Trouser in dolphin grey, the Super Skinny Clean in grey and the Slouchy Slim Rocker in black. The collection also features pieces that are either a natural extension of denim or that pair nicely with jeans, including the lightweight chambray jacket, a lightweight denim blazer and tailored dress shirts.

“Fabric and fit are the keys to the fall collection— focal points of every piece. We’ve taken beautiful and interesting fabrics and then tested their reaction to different cuts, washes and dyes. The result is a range of new styles and fits that stretch beyond denim into a broader collection,” said Rosella Giuliani, Gap’s 1969 Creative Director.

Denim prices range from $59.50-$69.50 for more basic styles and $59.95-$89.95 for more fashion-forward styles and higher-end fabrics.

About Gap Inc.
Gap Inc. is a leading global specialty retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, and Athleta brands. Fiscal year 2010 net sales were $14.7 billion. Gap Inc. products are available for purchase in over 90 countries worldwide through about 3,100 company-operated stores, about 175 franchise stores, and e-commerce sites.

Here are some miscellaneous points about this launch – its promotion strategy, a video explaining the different styles in 1969 and a behind the scenes video on ‘Born to Fit’

1. Gap will rely on Facebook instead of TV ads to reach customers. Gap has created a Facebook Page . The ‘Born To Fit’ campaign is designed to make it interactive and anyone with a facebook account  can upload their photos and create  a ‘Born to ….” tagline. So you will find  photos of people with interesting taglines like ‘Born to Smile’, ‘Born to Dance’ , ‘Born to Tell Stories’   and many more .. This  widget is posted on a users facebook profile and if approved, on the Gap’s facebook page also. The idea is clear – let people create their their own widgets around Gap 1969 and share with the world. This way consumers would be themselves marketing the company’s product . Cool..
2. Gap seems to be luring the stock traders at the New York Stock Exchange to push up the Gap stock price by providing them 1200 free 1969 jeans..Well actually , it was in commemoration of Gap’s 40th Anniversary coinciding with the launch of the premium denim line.
3. Learn about Gap 1969 from Gap’s Denim architect: This is a nice video from Gap explaining the different women’s and men’s styles and why they think they are so special .

4. And here is a behind the scenes video for ‘Born to fit ‘ campaign.

Perhaps to stress  the premium denim label of these jeans , the launch has been made at Robertson Boulevard -which is one of the most important retail destinations for denim in L.A  – in a heritage inspired  denim pop-up store with a number of celebrities  including Ashlee Simpson -Wentz, Emma Roberts, Molly Sims, Anthony Kiedis and Halle Berry  in attendance.

So don’t you need to spend  $200 for a jeans with great fit and fabrics and finishes ?

Answer would be yes if you believe what  Gap claims . The creative director for this line – Patrick Robinson – spent a year and a half fine-tuning the line, from shopping around for fabrics, and teaching factories how to make those perfect hand-made finishes, to working with several body types to master that perfect fit.  He says

“For me, honestly, these are the best fitting jeans in the world.  We’ll go up against any brand of any jean, and these fit better,”

“We want[ed] jeans that, for women, make you have the best butt in the world ”.

Lets wait and see if the customers are going to echo his sentiments .

Some features of the new collection