Gap Inc is an apparel retail company. It offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, Athleta, and Intermix brands.
Though the group has been shifting strategy to align closer to the new styles and pricing points that teenagers want, fast-fashion giants such as Hennes & Mauritz (HMRZF), Fast Retailing (FRCOY), and Inditex (IDEXY) appear to be at least a step ahead.
What to watch: Critical to the successful transition of any teen retailer toward a fast-fashion model will be the ability to retool supply chains and cut down manufacturing turnaround times. Gap might have the edge in this area..
Levi Strauss says it will cut 800 jobs in a cost-cutting move.
The private company says it will save as much as $200M in annual costs after the job reductions are enacted.
The development is interesting in light of the stance of many apparel retailers (AEO, ARO, ANF, LB, GPS, ZUMZ, EXPR, GES) that their recent shortfall in sales and traffic is a temporary weather-related issue. A 20% cut in its work force by Levi Strauss is no ray of sunshine for the outlook on the industry.
Apparel stocks are getting roughed up a bit after Express is the latest retailer to come in with a profit warning for Q1.
The winter storms and holiday promotions that plagued December and January sales totals set the tone for the sector early in the quarter, but concerns are deepening that the promotional atmosphere will be tough to shake off as traffic trends stay weak into March.
Notable decliners: Lululemon (LULU) -3.7%, Aeropostale (ARO) -2.3%, American Eagle Outfitters (AEO) -2.9%, Gap (GPS) -1.9%.