Gap and Old Navy

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Alpha8472
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Gap and Old Navy

Post by Alpha8472 »

The Old Navy CEO was let go and the chain is seeking a new CEO after 3 months of terrible sales at Old Navy.

Gap seems to be having all sorts of problems. Old Navy was the money making brand of the company just a few years ago. What happened?

The company was doing so much business several years ago that they opened up a new Old Navy store several hundred feet away from another Old Navy store in Concord, California. They have 2 stores within walking distance, but in separate strip malls. They closed the nearby Gap store in Sunvalley Mall across the freeway in Concord.

In this strip mall in Concord, you have Gap, Banana Republic, and Old Navy. Then another Old Navy across the parking lot. Not kidding.

The stores used to be packed with customers, but now they are not doing well at all.
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Re: Gap and Old Navy

Post by storewanderer »

I thought they were separating Old Navy. What happened with that? Also didn't they separate the outlet stores from the main chain?


Reno area used to have 4 Old Navy and 1 Old Navy outlet. Now there is 1 Old Navy and 1 Old Navy outlet.
Reno area also used to have 2 Gap and 1 Gap Outlet. Now there is just 1 Gap.

Seems to me they did a lot of store pruning. Also don't forget those Old Navy closures in San Francisco...
lake52
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Re: Gap and Old Navy

Post by lake52 »

Gap Inc is opening brand new stores for all four of its mainline concepts (Gap, Banana Republic, Old Navy, and Athleta) under one roof in downtown SF. I’d imagine this will give a good idea of what the future of the company will look like.

https://www.bizjournals.com/sanfrancisc ... ro-hq.html

They also just sold the old Old Navy headquarters in downtown SF to a large developer. I would imagine this went somewhere in the 500 million dollar range as Gap bought the building for 350 million in 2019. SF real estate, especially in that neighborhood continues to skyrocket with almost 100% life science occupancy. Developers can’t move fast enough to convert office / build new to meet the demand. That is a nice cash infusion for a company looking to reinvent itself.
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Re: Gap and Old Navy

Post by storewanderer »

lake52 wrote: April 23rd, 2022, 6:29 pm Gap Inc is opening brand new stores for all four of its mainline concepts (Gap, Banana Republic, Old Navy, and Athleta) under one roof in downtown SF. I’d imagine this will give a good idea of what the future of the company will look like.

https://www.bizjournals.com/sanfrancisc ... ro-hq.html

They also just sold the old Old Navy headquarters in downtown SF to a large developer. I would imagine this went somewhere in the 500 million dollar range as Gap bought the building for 350 million in 2019. SF real estate, especially in that neighborhood continues to skyrocket with almost 100% life science occupancy. Developers can’t move fast enough to convert office / build new to meet the demand. That is a nice cash infusion for a company looking to reinvent itself.
That new store opening at HQ is only going to be between 15k and 20k square feet (total- not per brand). Also that area around their HQ is not a general merchandise retail area at all so from a productivity standpoint it is not likely to be overly productive. I am guessing they figure as long as they can slightly break even at least they can say they did not almost close every store in the city given how many stores they've closed in the city. Also operationally it is a pretty good idea to have a store at HQ for a variety of reasons so why not open to the public and let it generate some revenue. I am sure this will be more efficient for them than large SKU-heavy flagship stores in high rent areas were, but this is not going to be an inventory heavy/high volume operation by any stretch.

Seems like they have been trying to reinvent themselves for a long time... like it never ends. Ongoing cost cuts, restructures, etc. Reminds me of Macy's. But the core foundation of their business is very strong and that is how they have stuck around as long as they have.
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Re: Gap and Old Navy

Post by lake52 »

They do still have flagship Old Navy, Athleta, and Banana Republics in the Union Square area, only Gap has left the area. There is some optimism around Union Square with more national chains opening than closing in 2022 so far. I don’t think they’ll exit the area any more than they already have.

That being said, I agree that the HQ stores will be experimental stores more than revenue producing stores. The Rincon Hill neighborhood is very wealthy but not a retail destination.
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Re: Gap and Old Navy

Post by storewanderer »

lake52 wrote: April 23rd, 2022, 6:44 pm They do still have flagship Old Navy, Athleta, and Banana Republics in the Union Square area, only Gap has left the area. There is some optimism around Union Square with more national chains opening than closing in 2022 so far. I don’t think they’ll exit the area any more than they already have.

That being said, I agree that the HQ stores will be experimental stores more than revenue producing stores. The Rincon Hill neighborhood is very wealthy but not a retail destination.
Hopefully they will not exit further as their remaining stores are important "pieces" at Union Square. Until all of the office workers are forced back to the offices every single day (which I don't see happening, many folks have zero desire to return to the office every day and in finance specifically I am hearing many stories that the employees are just flat out not showing up the 2 days a week etc. they are being asked to go in and keep working from home...), I don't see Union Square (and various other big city downtowns) retail recovering. It isn't only the presence of more people in the area, visitors who travel in for projects and spend money at night in the area, etc. as it is also the fact that folks who are not going to the office every day, simply don't have as much purchase frequency on clothing as they did when they were going into the office every day...
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