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Is this the end of Gap's European journey?

By Don-Alvin Adegeest

Oct 22, 2020

Three years ago, in 2017, Gap closed its UK merchandising operations. The New York-based company had sought to centralise its global workforce, despite the European market showing different requirements in assortment and fit. At the time it affected all roles within the UK team, from allocators and assistant merchandisers to merchandising directors.

A few years prior Gap shuttered its London design team, in similar fashion aiming to centralize its creative roles, designing for all markets from its New York studio.

In January this year Gap closed 40 stores as part of a previously announced plan to shutter 230 stores. But that was before the ravaging effects of Covid-19 onto the global retail industry.

This week the company announced it is looking at possible closures across the United Kingdom, France, Ireland and Italy as well as reviewing its warehouse and distribution model.

Throughout the last decade, Gap has been overhauling – particularly shuttering – its European retail network and operations, although now it appears its European journey really has come to an end.

##Gap didn’t conquer the European customer Long fluctuating amidst changing economies, the Gap, once a leader in casual and athleisurewear, hasn’t been able to conquer the European customer the same way it has in America, as its sales figures would iterate.

In 2019, the group, which in addition to Gap also includes Old Navy, Banana Republic and Athleta, recorded net sales of 16.4 billion dollars, down 1 percent on 2018. In the saw period the group also saw its profits drop to 351 million dollars, compared to 1 billion in the previous year. Despite a 95 percent increase in online shopping, in the second quarter of 2020 the group’s sales fell by 18 percent, due to a near 50 percent loss of in-store purchases.

The trials and tribulations at the Gap began many moons before Covid-19. The company suffered at its inability to keep up with new buying habits dictated by fast fashion players such as the brands of competitors H&M and Inditex. Despite a potential win with its new 10 year partnership with Yeezy, it will be well into 2021 until the product is released. Whether or not it will restore the brand’s lustre remains to be seen.

Image via Gap Inc.