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Gap Inc. shifting focus—and store footprint—to two brands

BY Marianne Wilson

Gap Inc. is shifting its emphasis to its two best-performing brands — and realigning its store portfolio to reflect its new emphasis.

The nation's largest specialty apparel retailer had decided that its future growth lies primarily in its lower-priced Old Navy and athleisure-positioned Athleta brands. As a result, it expects to close about 200 underperforming Gap and Banana Republic stores over the next three years. Banana Republic has been a particularly dismal spot for the retailer, with 10 straight quarters of same-store sales declines.

During the same time period, the company will add about 270 Old Navy and Athleta stores across its portfolio. Gap expects Old Navy to exceed $10 billion and Athleta to exceed $1 billion in net sales in the next few years, driven by growth in online and mobile channels, U.S. store expansion, and continued market share leadership in loyalty categories.

In addition, Gap Inc. will accelerate its online and mobile strategies during the next three years with a continued "significant" investment in such areas as direct fulfillment capacity, loyalty, personalization, omnichannel services, artificial intelligence and other data-driven customer experiences.

Gap expects to save about $500 million in expenses over the next three years by "better leveraging its size and scale, cross-brand synergies and streamlining operations and processes." It said it plans to reinvest part of the savings in its growth initiatives, "providing opportunity for margin expansion."

"Over the past two years, we’ve made significant progress evolving how we operate – starting with getting great product into the hands of our customers, more consistently and faster than ever before,” said Art Peck, president and CEO, Gap Inc. “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.”

Gap Inc. products are available for purchase in more than 90 countries worldwide through about 3,200 company-operated stores, about 450 franchise stores, and e-commerce sites.

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ECOMMERCE

Cloud computing to drive Billabong’s omnichannel experience

BY Deena M. Amato-McCoy

A board sports apparel retailer is taking steps to blend its physical and digital retail channels.

Billabong is leveraging the Aptos Singular Commerce platform to support omnichannel retailing across its global enterprise. The cloud-based solution will merge the retailers’ physical and digital retail channels, and create a single view of customers, inventory and orders, among other operations.

In addition to managing point-of-sale, the solution also supports customer relationship management (CRM), order management, merchandising and auditing functions. By integrating these functions, Billabong is positioned to deliver truly seamless customer experiences regardless where, when or how its customers shop, the company said.

Transitioning to a cloud-based platform also helps Billabong to consolidate its retail technology stack, and accelerate the implementation of new solutions — goals that required a seasoned partner.

“Aptos’ global presence, leading cloud-based technology, and professional services and implementation team were important considerations in our selection process,” said Michael Yerkes, senior VP, global operations of Billabong International Limited.

Billabong operates 372 retail stores, as well as operates e-commerce sites for each of its key brands, Billabong, RVCA, Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf and Xcel.

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C-SUITE

Starbucks taps former Sam’s Club CEO as No.2 executive

BY Marianne Wilson

Starbucks Corp. has named a former Walmart executive as its next COO.

The coffee giant appointed Rosalind Brewer as group president and COO, effective Oct. 2. She is the first woman, and first African American, to hold such a high post at Starbucks.

Brewer, who joined the Starbucks board in January, served as CEO of Sam's Club, a division of Walmart, from 2012 until she stepped down in January 2017. Prior to that, she spent six years in executive roles at Walmart. Before joining Walmart, she spent 22 years at Kimberly-Clark Corp.

Brewer is highly regarded throughout the retail industry. When she left Sam's Club, Walmart CEO Doug McMillon told employees in a memo that "she wants a new challenge."

Brewer will report to Starbucks' president and CEO Kevin Johnson and serve as a member of Starbucks senior leadership team. In her new role, Brewer will lead the company’s operating businesses across the Americas (Canada, U.S. and Latin America), as well as the global functions of supply chain, product innovation, and store development organizations.

“Starbucks is a culture-first company focused on performance and Roz is a world class operator and executive who embodies the values of Starbucks," said Kevin Johnson, Starbucks president and CEO. "She has been a trusted strategic counselor to me ever since she joined our board of directors, and I deeply value her insight, business acumen, and leadership expertise."

Brewer will continue to serve on the Starbucks board of directors.

“As a passionate customer of the brand and recently-elected board member, I have a deep love and admiration for the Starbucks brand and its people," Brewer said. "I am so honored to have the pleasure of working with the Starbucks leadership team to realize our highest of aspirations for the company and I look forward to working closely with the astute and talented leaders across the enterprise.”

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