Gap Inc.

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The Gap, Inc.
Public
Traded as
Industry Retail
Founded
Founder
Headquarters San Francisco, California, U.S.
Number of locations
  • 3,594 (Q4 2017)[1]
  • 2,372 (US, 2017)[2]
Area served
Worldwide
Key people
Products
Revenue Increase US$15.855 billion (2017)[4]
Increase US$1.479 billion (2017)[4]
Increase US$848 million (2017)[4]
Total assets Increase US$7.989 billion (2017)[4]
Total equity Increase US$3.144 billion (2017)[4]
Number of employees
~135,000 (December 2017)[4]
Subsidiaries
Website

The Gap, Inc.,[5] commonly known as Gap Inc. or Gap, (stylized as GAP) is an American worldwide clothing and accessories retailer.

It was founded in 1969 by Donald Fisher and Doris F. Fisher and is headquartered in San Francisco, California. The company operates five primary divisions: Gap (the namesake banner), Banana Republic, Old Navy, Intermix, Weddington Way, and Athleta. Gap Inc. is the largest specialty retailer in the United States, and is 3rd in total international locations, behind Inditex Group and H&M.[6] As of September 2008, the company has approximately 135,000 employees and operates 3,727 stores worldwide, of which 2,406 are located in the U.S.[7]

The Fisher family remains deeply involved in the company, collectively owning much of its stock.[8] Donald Fisher served as Chairman of the Board until 2004, playing a role in the ouster of then-CEO Millard Drexler in 2002, and remained on the board until his death on September 27, 2009. Fisher's wife and their son, Robert J. Fisher, also serve on Gap's board of directors. Robert succeeded his father as chairman in 2004 and also served as CEO on an interim basis following the resignation of Paul Pressler in 2007, before being succeeded by Glenn K. Murphy up until 2014. On February 1, 2015, Art Peck took over as CEO of Gap Inc.[9]

History[edit]

In 1959, Don Fisher, a California commercial real estate broker specializing in retail store location, was a social friend of Walter "Wally" Haas Jr, President of Levi Strauss & Co. Fisher was inspired by the sudden success of 'The Tower of Shoes' in an old Quonset Hut in a non-retail industrial area of Sacramento, California.[10][11] a terrible retail location), that drew crowds by advertising that no matter what brand, style or size of shoes a woman could want it was at The Tower of Shoes. And knowing that even Macy's, the biggest Levi's customer, was constantly running out of the best selling Levi's sizes, and colors, Fisher asked Haas to let him copy The Tower of Shoes' business model and apply it to Levi's products. Haas referred Fisher to Bud Robinson, his Director of Advertising, for what Haas assumed would be a quick refusal; but instead Robinson and Fisher carefully worked out a legal test plan for what was to become The Gap (named by Don's wife Doris Fisher).

Fisher agreed to stock only Levi's apparel in every style and size, all grouped by size, and Levi's guaranteed The Gap to be never out of stock by overnight replenishment from Levi's San Jose, California warehouse. And finally, Robinson offered to pay 50% of The Gap's radio advertising upfront and avoided antitrust laws by offering the same marketing package to any store that agreed to sell nothing but Levi's products.

Fisher opened the first Gap store on Ocean Avenue in San Francisco on August 21, 1969; its only merchandise consisted of Levi's and LP records to attract teen customers.

In 1970, Gap opened its second store in San Jose. In 1971, Gap established its corporate headquarters in Burlingame, California with four employees. By 1973, the company had over 25 locations and had expanded into the East Coast market with a store in the Echelon Mall in Voorhees, New Jersey. In 1974, Gap began to sell private-label merchandise.

In the 1990s, Gap assumed an upscale identity and revamped its inventory under the direction of Millard Drexler.[12] However, Drexler was removed from his position after 19 years of service in 2002 after over-expansion, a 29-month slump in sales, and tensions with the Fisher family. Drexler refused to sign a non-compete agreement and eventually became CEO of J. Crew. One month after his departure, merchandise that he had ordered was responsible for a strong rebound in sales.[13][14][15] Robert J. Fisher recruited Paul Pressler as the new CEO; he was credited with closing under-performing locations and paying off debt. However, his focus groups failed to recover the company's leadership in its market.

In 2007, Gap announced that it would "focus [its] efforts on recruiting a chief executive officer who has deep retailing and merchandising experience ideally in apparel, understands the creative process and can effectively execute strategies in large, complex environments while maintaining strong financial discipline". That January, Pressler resigned after two disappointing holiday sales seasons and was succeeded by Robert J. Fisher on an interim basis.[16][17][18] He began working with the company in 1980 and joined the board in 1990, and would later assume several senior executive positions, including president of Banana Republic and the Gap units.[19] The board's search committee was led by Adrian Bellamy, chairman of The Body Shop International and included founder Donald Fisher. On February 2, Marka Hansen, the former head of the Banana Republic division, replaced Cynthia Harriss as the leader of the Gap division. The executive president for marketing and merchandising Jack Calhoun became interim president of Banana Republic.[20] In May, Old Navy laid off approximately 300 managers in lower volume locations to help streamline costs. That July, Glenn Murphy, previously CEO of Shoppers Drug Mart in Canada, was announced as the new CEO of Gap, Inc. New lead designers were also brought on board to help define a fashionable image, including Patrick Robinson for Gap Adult, Simon Kneen for Banana Republic, and Todd Oldham for Old Navy. Robinson was hired as chief designer in 2007, but was dismissed in May 2011 after sales failed to increase. However, he enjoyed commercial success in international markets.[21][22][23] In 2007, Ethisphere Magazine chose Gap from among thousands of companies evaluated as one of 100 "World's Most Ethical Companies."[24]

In October 2011, Gap Inc. announced plans to close 189 US stores, nearly 21 percent, by the end of 2013; however, it also plans to expand its presence in China.[25][26] The company announced it would open its first stores in Brazil in the Fall of 2013.[27]

In January 2015, Gap Inc announced plans to close their subsidiary Piperlime in order to focus on their core brands. The first and only Piperlime store, based in SoHo, New York City, closed in April.[28]

In September 2018, Gap Inc began publicizing Hill City, a men's athletic apparel brand they plan to launch in October 2018.[29]

Corporate identity[edit]

[edit]

Gap Inc. owns a trademark to its name, "Gap". The Gap's original trademark was a service mark for retail clothing store services. The application was filed with the United States Patent and Trademark Office on February 29, 1972, by The Gap Stores; registration was granted on October 10, 1972. The first use of the trademark was on August 23, 1969, and expanded to commercial usage on October 17, 1969. A second application was filed by Gap Stores, Inc. on September 12, 1974, this time for a trademark filed for shirts. The first usage for shirts and clothing products was on June 25, 1974. Trademark registration was granted on December 28, 1976. Both the service mark and trademark are registered and owned by Gap (Apparel), LLC of San Francisco, California.

On October 4, 2010, in an effort to establish a contemporary presence, Gap introduced a new logo. It was designed with the Helvetica font and reduced the prominence of the brand's iconic blue box. After much public outcry, the company reverted to its previous "blue box" logo on October 12, after less than a week in use.[30][31] Marka Hansen, the executive who oversaw the logo change, resigned February 1, 2011.[32]

Brands[edit]

Banana Republic[edit]

Banana Republic, a small safari-themed clothing retailer, was purchased by Gap in 1983 and was rebranded as an upscale clothing retailer in the late 1980s.

Old Navy[edit]

Old Navy was launched in 1994 as a value chain with a specialty flair.

Forth & Towne[edit]

Forth & Towne, the company's fourth traditional retail concept, was launched on August 24, 2005, featuring apparel targeted toward women 35 years and older.[33] On February 26, 2007, after an 18-month trial period, it was discontinued, and the 19 stores were closed.[34]

Piperlime[edit]

A fifth brand, the online clothing and accessories retailer Piperlime, was created in 2006; however, as of April 2015, the brand has been retired.[35] A sixth brand, Athleta, a women's athletic wear line, was added in 2009.[36]

Intermix[edit]

Intermix, a multi-brand fashion retailer founded in 1993, was acquired by Gap Inc. in 2012.[37]

Gap's Sales by Division in Q1 2009[edit]

Divisions Total revenue
Gap North America $834 million[38]
Banana Republic North America $475 million[38]
Old Navy North America $1.18 billion[38]
International $369 million[38]
Gap Inc Direct $267 million[38]

Marketing[edit]

The Gap originally targeted the younger generation when it opened, with its name referring to the generation gap of the time.[39] It originally sold everything that Levi Strauss & Co made in every style, size, and color, and organized the stock by size. The Gap was the first of many shops that carried only Levi's. In 1973, Gap started making their own jeans as a way to differentiate themselves from department stores.[40] Gap inc is doing market segmentation. Gap's current marketing works to appeal to a broad demographic of customers, whereas Banana Republic presents a sophisticated image with an self expressing easygoing personality and Old Navy focuses "fun, fashion, and value" for families and younger customers. While the company has been criticized for blandness and uniformity in its selling environments, it maintains that it tailors its stores "to appeal to unique markets" by developing multiple formats and designs.[41] The domain www.gap.com attracts over 18 million visitors annually, according to a 2008 Compete.com survey.[42] The brand is being criticized in the UK because the merchandise that is offered to the UK customers cost double the prices (or even a direct $/£ swap) found in the United States. Gap also does not offer XXL or larger sizes in the UK stating the UK market does not require them in contrast to market leader NEXT who offer a variety of larger sizes in the UK.

International presence[edit]

The closing down sale at the Gap store in Westfield Sydney

Gap operates company-owned stores in the United States, Canada, Mexico, the United Kingdom, France, Italy, Ireland, Japan, China, and Taiwan as of May 2016.[43] Including both company-owned and franchised stores, there are Gap, Banana Republic, Athleta, Intermix, or Old Navy stores in 43 countries.[44] In January 2008, Gap signed a deal with Marinopoulos Group to open Gap and Banana Republic stores in Greece, Romania, Bulgaria, Cyprus, and Croatia.[45] In February 2009, Elbit Imaging, Ltd. secured a franchise to open and operate Gap and Banana Republic stores in Israel.[46] In August 2010, the company opened its first store in Melbourne, Australia at Chadstone Shopping Centre.[47][48] In September 2011, Komax opened the first Gap store in Chile, due to a franchise.[49] In October 2011, the first GAP store opened in Warsaw, Poland,[50] but shut it down and two other locations in Wrocław and Katowice in 2015. Gap now has a store in New Delhi, India which opened in May 2015. On February 20, 2016, Gap launched stores in Mumbai at Oberoi Mall and Infinity-2.

In May 2016, Gap Inc. announced it would shutter all Old Navy stores in Japan in response to poor Q1 performance for Old Navy and consistent losses across the organization.[51]

In 2017, Gap closed all seven of its stores in Israel.[52] In 2018, Gap closed all its stores in Australia.[53]

Product Red[edit]

In 2006, Gap took part in the Product Red campaign with the launch of a special RED collection, including a T-shirt manufactured in Lesotho from African cotton. The expanded Gap Product Red collection was released on October 13, 2006. 50 to 100 percent of the profits went to the Global Fund, depending on the item.[54] The company continued the products into 2007, especially in the lead up to Valentine's Day, using slogans such as "Admi(RED)" and "Desi(RED)." National Labor Committee for Worker and Human Rights activists criticized Gap's partnerships because Gap has historically been accused of sweatshop-like conditions.[55] Product Red has contributed over $45 million to the Global Fund, more than any other private donation received to date. Other launch partners included American Express, Apple Inc., Converse, Hallmark, Emporio Armani, and Motorola.

Labor controversies[edit]

Reports from news outlets of sweatshop workers in Saipan not being paid for overtime work, being subjected to forced abortion, and being required to work in unsafe working conditions surfaced in 1999.[56] In 2003, a class action lawsuit against Gap and 21 other companies was started; a settlement of 20 million dollars was reached.[57]

In May 2006, adult and child employees of Western Factory, a supplier in Irbid, Jordan, were found to have worked up to 109 hours per week and to have gone six months without being paid. Some employees claimed they had been raped by managers.[58] The government of Jordan launched an investigation into the supplier and other textile factories and announced actions to prevent future abuses.[59] Walmart, who also sources from the supplier, confirmed "serious problems with working conditions" at Western Factory and other Jordanian suppliers. As of May 2018, Gap no longer sources from that supplier, though it continues to source from other manufacturers in Jordan.[60]

On October 28, 2007, BBC footage showed child labor in Indian Gap factories.[61] The company denied knowledge of the happenings; it subsequently removed and destroyed the single piece of clothing in question, a smock blouse, from a British store. Gap promised to investigate breaches in its ethical policy.[62]

Bangladeshi and international labor groups in 2011 put forth a detailed safety proposal which entailed the establishment of independent inspections of garment factories. The plan called for inspectors to have the power to close unsafe factories. The proposal entailed a legally binding contract between suppliers, customers and unions. At a meeting in 2011 in Dhaka, major European and North American retailers, including Gap, rejected the proposal. Further efforts by unions to advance the proposal after numerous and deadly factory fires have been rejected.[63] After the 2013 Savar building collapse, Kohl's became a founding member of the Alliance for Bangladesh Worker Safety.

On February 19, 2014, Glenn Murphy, CEO of Gap Inc., announced Gap will raise the minimum wages for its 65,000 U.S. store employees.[64]

Management[edit]

Leadership[edit]

The current leadership is:[65]

  • Art Peck, Chief Executive Officer, Gap Inc.[66]
  • Teri List-Stoll, EVP and CFO
  • Neil Fiske, President & CEO, Gap [67]
  • Mark Breitbard, President & CEO, Banana Republic
  • Sonia Syngal, President & CEO, Old Navy
  • Nancy Green, President and CEO, Athleta
  • Jyothi Rao, President and General Manager, Intermix
  • Michael Yee, EVP and General Manager, Greater China
  • Julie Gruber, EVP, General Counsel, Corporate Secretary, Chief Compliance Officer, Gap Inc.
  • Brent Hyder, EVP, Chief People Officer, Gap Inc. [68]
  • Sebastian DiGrande, EVP, Strategy & Chief Customer Officer, Gap Inc.
  • Christophe Roussel, EVP Global Sourcing, Gap Inc.
  • Sally Gilligan, Chief Information Officer[69]
  • Shawn Curran, EVP, Global Supply Chain and Product Operations, Gap Inc.

Board of directors[edit]

Board as of May 2018:[70]

Stores[edit]

A Gap store on Briggate in Leeds, West Yorkshire.

As of the end of Q4 2017, Gap Inc. had 3,594 company-operated or franchised stores in operation across 46 countries and had the ability to ship to 90 countries.[71][72] Stores in Brazil, Canada, China, France, Italy, Ireland, Japan, Mexico, UK, and US (including Puerto Rico) are company-owned; those outside of these countries are owned and operated by franchises.

Gap (1593)
Banana Republic (713)
Old Navy (1102)
Athleta (148)
Intermix (38)

See also[edit]

References[edit]

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Gap sorry for selling T-shirt with 'incorrect' map of China

External links[edit]