- Prachi Singh |
As a part of its growth strategy, Gap has decided to focus its energies on Old Navy and Athleta, which it believes will exceed 10 billion dollars and 1 billion dollars in net sales respectively, in the next few years, driven by growth in online and mobile channels, US store expansion, and continued market share leadership in loyalty categories. Gap added that the strategy also includes the closure of about 200 underperforming Gap and Banana Republic specialty locations.
“Over the past two years, we’ve made significant progress evolving how we operate. 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,” said Art Peck, President and CEO, Gap Inc. in a statement.
Important highlights of Gap’s growth strategy
The company said that its websites are built on a proprietary e-commerce platform that enables wide-ranging capabilities, including cross-brand shopping, omni-channel services, and an upcoming buy online, pick-up in store service, as well as a new personalization engine powered by customer data. Over the next three years, the company aims to make significant investment in areas including direct fulfillment capacity, loyalty, personalization, omni-channel services, artificial intelligence and other data-driven customer experiences.
Over the next three years, the company also expects to add about 70 net new stores, with the addition of about 270 Old Navy, Athleta and value expressions across the portfolio.
The company expects about 500 million dollars in expense savings over the next three years by better leveraging its size and scale, cross-brand synergies and streamlining operations and processes. The company plans to reinvest a portion of productivity related savings in its growth initiatives, providing opportunity for margin expansion.