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Gap Inc, A Case Study

1777 words - 7 pages

Gap Inc. is a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, and Old Navy brand names. There are four brand names included in Gap: Gap, GapKids, BabyGap, and GapBody. There are worldwide Gap headquarters in the San Francisco Bay Area, product development offices in New York City and distribution operations and offices coordinating sourcing activities around the globe (www.gapataglance.com).Today there are more than 4,200 stores worldwide in operation by Gap Inc. If you are out of the country and want to shop Gap Inc., there are five countries outside of the United States: Canada, France, Japan, Germany and the United Kingdom. Banana Republic and Old Navy are only located in the United States and Canada. Gap Inc. employs about 165,000 people (www.gapataglance.com). You can receive your product within seven to ten days or you can receive overnight shipping (www.gap.com). The President and CEO of Gap Inc. is Paul Pessler (www.gapataglance.com).Donald and Doris Fisher founded Gap Inc. in 1969, in San Francisco, California. Gap Inc. was originally a single store with only a handful of employees. They opened their jeans-only store the Gap, after "the generation gap," and concentrated on selling Levi's jeans. The Fisher's were focusing mainly on the teenage generation, and they continued expanding throughout the 1970's, and began making their own private-label clothing and accessories in 1974. The Fisher family hired a man by the name of Millard "Mickey" Drexler, in 1983. At the time when he joined the team, the Gap was "an undistinguished apparel chain" with sales over $480 million. He helped them make several profitable transactions (www.esm.ucsb.edu).The purchase of Banana Republic in 1983, only led to Gap furthering their expansion. The company continued to grow in the 80's and 90's. GapKids started in 1985, BabyGap in 1990, and opening its first stores in Canada and UK. In 1993, Old Navy Clothing Co. was marketed. The new chain was known for being ultra-hip and having low cost clothing. This new company brought in $1 billion in less than four years. This was a first for the industry. The peak of Gap's success was in 2000, when the shares were selling at a high in February 2000 at $54 and revenues were also at their peak (www.esm.ucsb.edu).Industry competition and its strategy to differentiate itself from "imitators," Gap began to sell trendier items like leather jeans and sequin shirts. The attempt to appeal to the younger, trendier, "Britney Spears and Christina Aguilera" led market analysts to criticize the Gap because they had lost their identity. The company reported an $8 million loss, in 2001, this being "the most difficult year ever" (www.esm.ucsb.edu).Gap's primary competitors are Abercrombie & Fitch, American Eagle Outfitters, and J Crew. A&F sells men's, women's, and kids' casual clothes and accessories, but they...

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