Gap Meets Retail 3.0

Gap Inc. (GPS) continues to generate growth but it still remains stable and slow. The company has been focused on making significant actions to help improve Gap brand's performance. Gap's revenue expectations for 2015 is predicted to be flat while its EPS is expected to dip 4 percent and return to growth next year.

The retailer's comparable sales for June 2015 were down 1 percent versus a 2 percent decrease last year.
Comparable sales by global brand for June 2015 were negative 5 percent versus negative 7 percent last year.

The retailer announced last month a partnership with Virgin Hotels, the lifestyle hotel brand founded by Richard Branson, which will provide guests of the hotel some of Gap's latest styles delivered to their hotel room. The guests are able to leverage Gap's Reserve in Store technology by shopping online at to reserve the styles and purchase the styles within a few hours time right from their hotel room.

“We're thrilled to be a part of Gap's first-ever Reserve in Store program for travelers. Virgin Hotels aims to bring innovation and change to the hotel industry, all while enhancing and easing the guest's stay. Having your trip's wardrobe delivered straight to your Chamber, all by clicking a button, is a service we know our guests will love,” said Doug Carrillo, Vice President Sales and Marketing, Virgin Hotels.

Gap's Reserve in Store program was developed to make it more convenient for customers to shop online. The hotel guests are able to place their favorite styles on hold and then later pick them up in their local store by using the program's “Find It Now” feature to view options from nearby Gap stores, reserve and pick up the items.

Gap's new CEO Art Peck aims to win in the Retail 3.0 era and become the retail company of the future. "We've been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever," Peck said. "Periods of disruption are periods of disproportionate opportunity.” “More money is made during disruptive times—but is also lost—than is made during times of stability."

For investors, Gap is considered a fast-growth brand. Further value could be discovered if the company makes a decision to spin off its Athletica retail business. Gap can benefit in the long term from its Old Navy and Banana Republic brands, current partnerships, global expansion, strong performance and improved merchandising areas.

By Jennifer Lynn

Copyrighted 2016. Content published with author's permission.

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