Gap Inc

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Gap Inc. has been a global leader in the specialty clothing market for over 20 years. Gap Inc., includes brands Gap, Banana Republic, Old Navy, Gap Outlet, Banana Republic Outlet, Online, and the newest addition to the brands portfolio, Fourth & Towne.

Current direct problems Gap Inc is face include the steady increase in new domestic initiatives from competing retailers; ie H&M, Zara, Mango; more focus around catering to niche consumer groups through the growing trends in the plus-size apparel market, and the worry of current market saturation with Gap Inc, challenge the company to stay current in consumers eyes in order to help build gross margin and increase market share. Several indirect issues however, are also plaguing the apparel market as a whole. A major one being the decrease in discretionary money available for consumers to spend creating a drop in personal consumption of clothing and accessories to a low of 5% in 2003.

With this in mind, Gap Inc began to refocus its energy around how to re-establish momentum and sustain its current position in the retail market.Gap Inc. began to start initiatives around creating a shopping experience that was enticing to customers, creating identities for each brand, and streamlining the behind the scenes work to support a more efficient business model. They also added a new brand, Fourth & Towne, to cater to a new demographic that they felt was presently un tapped by the other brands.

Gap Inc’s decision of adding a new brand to their portfolio during a time of decreased consumer apparel spending is a bold move. Another option to help capture the growing niche market could have been to create a new sub-brand under the BR or Gap name. Gap and BR have always been know for strong customer loyalty and with an increasing age demographic, customers who grew to love the brand would still be able to shop within these stores. This would also allow the company to create a “through the years” approach to retail that many...
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