Why Did Gap And The Old Navy Guangzhou Store Suddenly Break Up?

Last week, Guangzhou World Plaza. Gap The Old Navy stores of Cape and Old Navy suddenly broke down. According to the world clothing and shoe net, one stone stirred up thousands of waves. Many consumers told reporters that Gap and Old Navy had closed many shops in many cities in mainland China.

According to consumers, Gap and Old Navy's Shanghai Wujiaochang health joint store, Gap Wuhan Cade Wu Sheng store, and Gap Chengdu Raffles shop are closed.

Subsequently, the reporter immediately consulted Gap and Old Navy's China official website, and found that Old Navy, Guangzhou sky ring and Wujiaochang store in Shanghai had disappeared from the website. On the Gap China official website, Guangzhou Tien Huan Plaza store, Shanghai Wujiaochang store, Wuhan Kade wusheng store and Chengdu Raffles shop are still listed. Besides the reporter confirmed the Guangzhou store, the reporter called three other stores, and the telephone was not empty. According to two brand According to China official website data, Old Navy operates 13 stores in mainland China, while Gap operates about 130 stores in mainland China.

Last week, in the event of a continuous closure of shops in mainland China, the company inquired about the mail of Gap Inc. (NYSE:GPS)

However, in the reports of the closure of Gap and Old Navy, Guangzhou Tian Huan store, there were suspicious sources saying that the company was carrying out a "larger strategic adjustment" and said that the situation was "too short to disclose too much at the moment".

On Tuesday, January 3rd, reporters again visited the official website of Gap China, where the number of unanswered or empty calls was still on the list, while the Guangzhou Tian Huan store was also listed, until around four p.m., Guangzhou Tian Huan store suddenly disappeared from the website.

Although Gap Inc. has been struggling for several years and has been closing down its costs for the past two years, the closing of the Chinese mainland market is still very unusual.

Gap Inc. Cape group entered the Chinese market in 2010, the four largest. Fast fashion The group, the latest group to enter the Chinese market, currently has about 140 stores on the mainland, the lowest among the four fast fashion groups, far less than 180 of the Zara with the least stores. However, Abinta Malik, who was promoted to executive vice president and general manager of Greater China in 2014, has expressed the hope that the Greater China market will become the second largest market of the group in the future.

According to the world clothing and shoe net, the second largest single market of Gap Inc. Cape group is the Canadian market which is the same as North America. As of the three quarter of October 29th, the Canadian market recorded a sales of 289 million US dollars, which accounted for 8%, a percentage point higher than that of the same period last year, while the Asian Pacific market share, including China, was 10%, unchanged from the same period last year. However, the Asia Pacific market includes many national markets, while the mainland market accounts for 1/3 of the Asia Pacific market, and the large Chinese market accounts for 40% of the Asia Pacific market.

Gap Inc. Cape group is currently the general manager of Greater China Abinta Malik took office at the end of 2014, Gap Inc. cover group in China to break through 100 stores, the then group Greater China President Jeff Kirwan Ke Weijie was promoted to the Global CEO of Gap cover Pu, and Abinta Malik was transferred to the general manager of Greater China by the senior vice president of the global online business of the global brand.

On the LinkedIn page of Abinta Malik, she claims that its Gap Inc. Cape group Greater China business grows at an annual rate of 20%. As Gap Inc. Cape group has not disclosed the performance of the individual Greater China market, it is not clear about the specific operation data of the group in the current Chinese market. As of the end of January 2016, in the 2015 fiscal year, the overall revenue of the Group Asia Pacific market was US $1 billion 502 million, accounting for 9%.

In 2015, Abinta Malik said in the interview that the group will reach 160 stores in Greater China by the end of 2015. However, according to the two major brands of the group, the total number of stores operated by Gap Inc. in the Greater China region is 152, including 97 mainland stores, 7 Hongkong stores, 9 Taiwan stores, 24 mainland stores with Gap Oultet and 2 Gap mainland stores. However, if the stores that have been closed but are still listed in the official website, the expansion of Gap Inc.'s stores in China is basically stagnant in the past year.

As a latecomer, the Gap Inc. Cape group is currently facing a rapid slowdown in China's apparel market, and is facing the most intense competition in history. Efficiency is undoubtedly the most important for the current Gap Inc. cover group. The two brands of the Old Navy and Banana Republic banana have previously left Japan and the UK market respectively.

After 6 years of development in the Chinese market, Gap Inc. Cape group's "sense of existence" is still weak, which may be one of the reasons why Gap Inc. has been closing up and adjusting its strategy in China. The recognition and competitiveness of the group's brand in the Chinese market may not be able to bear the pressure of further expansion, especially in the face of double-digit retail rents and high labor costs. On the contrary, the average flat efficiency of the group is declining, and the total flat effect in the first three quarters of fiscal year 2016 is $240 / sq, which is less than 246 US dollars in the same period in the 2015 fiscal year.

In addition, it is worth noting that the Gap brand is the only brand of the four fast fashion brands to enter Tmall Tmall.com and JD.com Jingdong at the same time. Taking into account the origin of Abinta Malik's e-commerce business, a more focused online business development may be a more prudent strategy for the group in China.

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