How Can Gap Be Pushed Back To The Cliff?

As we all know, although Amazon.com Inc. Amazon is the largest electricity supplier in the world, it has a strong position and voice. But since its establishment, it has been difficult to capture the US brand as a third party platform. This contrasts sharply with its rival Alibaba Group Holding Ltd. (NYSE:BABA) Alibaba in China.

The group of three big brands, Gap Inc. (NYSE:GPS), has been pushed to a dead end, so that Art Peck, the group's chief executive, said at the annual shareholders' meeting on Tuesday May 17th that the group might consider entering Amazon.com Inc. (NASDAQ:AMZN) Amason for the final hope of recovery.

As we all know, although Amazon.com Inc. Amazon is the largest electricity supplier in the world, it has a strong position and voice. But since its establishment, it has been difficult to capture the US brand as a third party platform. This contrasts sharply with its rival Alibaba Group Holding Ltd. (NYSE:BABA) Alibaba in China.

As the electricity business started earlier, the major clothing retailers in the United States basically have their own online channels. In order to avoid passivity, they refused all the olive branches from Amazon.com Inc. Amazon. Only a few large retailers such as PHV Corp. and Amazon.com Inc. Amazon had deep cooperation. PHV Corp.'s Calvin Klein, Tommy Tommy, and two major brands all focused on Amazon as the third party sales platform.

In February 2015, the new Art Peck was entrusted with the task of revitalizing the largest clothing group in the United States. Unlike many of its predecessors from the traditional retail sector, Art Peck was the first Gap digital CEO company to come from the digital and consulting field. Before joining Gap Inc. cover group, he served in the Boston Consulting Boston consulting company.

However, during the 16 months' term of Art Peck, he not only failed to lead the recovery of Gap Inc. Cape group, but in the past two quarters, the only hope brand of the group, Old Navy and old navy, also began to plummet, and the trend was extremely fierce. In October 2015, the old Old Navy lost the meritorious CEO Stefan Larsson. The latter jumped to the United States, the largest luxury group, the Ralph group, the Ralph Lauren group.

At the shareholders' meeting on Tuesday, Art Peck said that from his point of view, it is impossible to ignore Amazon.com Inc. and Amazon and other channels.

He said the group has been considering opportunities outside traditional stores and beyond channels.

Last Tuesday, Gap Inc. Cape group released another disappointing quarterly and monthly sales.

According to the no fashion Chinese network data, the first quarter of the year ended April 30, 2016, the sales of Gap Inc. & amp; G group fell 5%, and the market forecast fell by 2.6%.

Net sales fell from $3 billion 660 million in the same period last year to US $3 billion 440 million, less than US $3 billion 540 million in market expectations, a decline of 6%, and has been retrogressive for fifth consecutive quarters.

In addition, the Group expects the EPS quarter of the first quarter to be 0.31-0.32 dollars, and only the market expectation of 0.44 US dollars is less than 3/4.

In March, the group warned of higher than expected.

Entering April means an increase in discount promotions, which is expected to generate pressure on gross profit margins in the first quarter.

Art Peck has repeatedly released the Gap Cape brand and the Banana Republic, the banana republic can start the signal of recovery in spring, but now there is no sign of recovery as well as the Old Navy's performance of Old Navy.

A group spokesman pointed out that the group's business turnover was slower than expected due to multiple reasons, such as the downturn in the retail industry caused by the macroeconomic cooling.

In addition, sales figures released by Gap Inc. in April showed that the group's crisis intensified, especially the largest source of revenue.

The Old Navy brand continued to deteriorate, and the group's earlier exaggerated revival plan apparently did not work.

The sales of Old Navy in the same store in April dropped by 10% compared with the same period last year, a decrease of 6% compared with March, which is far from the 2.6% growth of market expectations.

Last year, when the Gap brand and the Banana Republic Banana Republic began to decline, the Old Navy Old Navy was still playing a strong growth engine role. Therefore, the group has been focused on supporting the top two brands, and the old navy of Old Navy Navy lost its former president Stefan Larsson last October.

In mid last month, the group has found a new brand president for the old navy of Old Navy. She is Sonia Syngal, vice president of global supply chain and product operation, who has served the group for 12 years.

At the end of January this year, R.W. Baird of the investment bank released a report again, saying that in the past year, the clothing giant increased by 91% to 30 million, and its growth rate was only 281% behind that of mobile phones and accessories, and 110% of household and horticultural analogues. The growth rate was third in all categories.

Amazon.com Inc. Amazon group's increased investment in the fashion industry began in 2008, in which the Gap Inc. GAAP group's Piperlime president, Cathy Beaudoin, joined the president of the fashion department. Cathy Beaudoin joined the group fashion department after the reorganization, and pushed into the studio and other infrastructure construction.

Under the Cathy Beaudoin tie, Amazon.com Inc.

The group launched its first Fashion TV advertising, fashion brand, men's beauty brand, luxury beauty brand, first designer brand store and so on. The company set up tens of thousands of square feet of large studios in New York to meet the shooting needs of Amazon.com. In fact, the group also owned many fashion business platforms including MyHabit (2011) and Shopbop (Amazon acquired in 2006) and East Dane (2013).

In April, the sales of Gap and Republic Banana were reduced, from 6% and 14% in March to 4% and 7% respectively, compared with the same period last year, and the two brands also made progress.

In April, the overall sales of Gap Inc. & amp; Cape group declined by 7%, far from Retail Metrics's combined growth of 1.1%.

Net sales of $1 billion 120 million, an annual decrease of 7.4%.

Looking back at Amazon.com Inc. Amazon, the e-commerce giant has already developed its own brand, which covers fashion categories, and a number of market organizations believe that Amazon.com Inc. Inc. is the largest apparel retailer in the United States.

In July 2015, the investment bank Cowen & Co. released a report that the e-commerce company expects to exceed Macy 's Inc. (NYSE:M) Messi's department store in 2017 to become the largest apparel retailer in the United States.

Cowen & Co. expects apparel business to be the main business of Amazon.com, which is estimated to account for 70% of sales, up to $16 billion in 2015 and will grow to 52 billion US dollars in 2020.

The bank said that in 2014, Macy 's Inc. Messi department stores accounted for 7% of the American Apparel, accessories and footwear market, while Amazon.com Inc. Amazon group took up 5% share. Macy' s Inc. Inc. Messi department store sold for 28 billion 100 million US dollars in 2014, of which 84% of clothing accessories category accounted for.

In addition to its own business, Amazon.com Amazon is also the third party sales brand of Calvin Klein, Disney, Columbia, Anne Klein, Diesel, Tommy Hilfiger and Levi 'Tommy, which are billions of dollars in giant apparel retail brands.

Since Art Peck no longer rejected Amazon.com Amazon at the shareholders' meeting, then Cathy Beaudoin, President of the fashion department of Amazon Inc. group, who served Gap Inc. Cape group, may take the initiative to re throw olive branches to Gap Inc. group.