Gap Inc. Outlines Strategies for its Brands
San Francisco Gap Inc. at its investor meeting Thursday presented an update on the company’s strategies for improving business at its brands, along with an overview of growth initiatives across its online and international businesses. At the meeting, which featured addresses by division heads, executives affirmed plans to eliminate 10% to 15% of Gap’s real estate holding by creating smaller stores and closing units over the next three to five years in hopes of increasing productivity.
Executives said they were pleased with the Gap brand’s efforts at strengthening its brand positioning globally and delivering a great product, and that it is now turning its attention to bringing customers back into stores. The brand doesn’t plan to do any more television advertising this year, but will shift to a mix of traditional and non-traditional marketing tactics. Gap’s top priorities for 2009 are driving traffic, executing on its real estate strategy and improving productivity.
With regards to Banana Republic, the company will focus on driving traffic, increasing differentiation, and offering ibrand-righti product. The brand opened its first store in the United Kingdom earlier this year, and the company anticipates further growth opportunities in Europe.
Old Navy has hired a new creative agency, Crispin Porter & Bogusky, to help align its marketing more closely with its redefined target customer: young moms shopping for their families. Top priorities for 2009 are improving the product assortments, driving traffic, delivering on its promise of value, and executing on its new store design.
Gap sees franchise stores overseas as another way to grow. The clothing seller has inked deals for franchises in 21 countries.
The company also views its online business as a strategic growth opportunity. Its e-commerce unit grew to $903 million in sales in 2007 from $595 million in 2005, and should break $1 billion this year.
Linens ‘N Things
NORTHBROOK, Ill. The remaining 371 Linens ‘N Things stores will begin closing their doors on Oct. 17. In conjunction with the closings, the stores will be selling off items at up to 30% off their regular price. The store closing sale is being conducted by a joint venture group comprised of Hilco Merchant Resources, Gordon Brothers Group, Hudson Capital, SB Capital Group LLC, Great American Group LLC and Tiger/Nassi Group.
Michael Keefe, president and ceo Hilco Merchant Resources, said, “Consumers will find great values on everything in the store. Many items will be discounted like never before. This sale comes at a perfect time for everyone to enjoy large savings on many of their holiday gift purchases. Consumers who arrive at the start of the sale will certainly have the best selection of products from which to choose. We don’t expect this sale to last very long.”
The end of LNT was in sight earlier this week when no buyer emerged to purchase the struggling housewares chain. An auction was scheduled for interested bidders on Oct. 14, but when no buyers submitted a qualified bid, the auction was canceled, according to court documents.
Steve & Barry’s appoints Kahn new ceo
PORT WASHINGTON, N.Y. Steve & Barry’s appointed Harold Kahn its ceo, effective immediately. Kahn has worked in the retail business for 35 years, including 10 years as chairman and ceo of Macy’s East division. In 2004, he left to launch a retail consulting business. Prior to that he served as ceo of Abraham and Straus, president of Montgomery Ward and ceo of Macy’s South and Macy’s West. He began his career in the training program at Macy’s in 1970.
“I am thrilled about the opportunity to help lead Steve & Barry’s, a retailer I believe offers a value proposition that’s second to none in the marketplace,” said Kahn. “I’ve been watching the company closely since it began launching amazing celebrity collections with Sarah Jessica Parker, Venus Williams, Amanda Bynes, Laird Hamilton and others. I’m looking forward to helping guide the company to ensure it reaches its full potential.”
Douglas Teitelbaum, managing principal of investment fund Bay Harbour Management, which together with York Capital Management purchased Steve & Barry’s out of bankruptcy this summer, said: “Hiring an extraordinary retail pro to lead Steve & Barry’s was our top priority in the strategic business plan we put together for getting the company on track to meet our profitability goals over the long term. We’re very fortunate that we were able to persuade Hal Kahn, one of the genuine greats in the field, to join the team. I think that’s testament to how big an impact Steve & Barry’s can make in retail over the next several years.”