Connect with us

Headlines

Gap Losing Sales Due to Snags in Supply Chain

Apparel company cites factory closures, warns of additional losses

mm

Published

on

Supply chain woes caused Gap Inc. to lose $300 million in sales in the run-up to the holiday season, according to CEO Sonia Syngal, who expounded on the issues in the company’s third quarter earnings call.

The loss, she said, was due to longer transit times and lost weeks of production that led to on-hand inventory shortages in the quarter. Syngal also cited a backlog at U.S. ports that “deteriorated meaningfully” from the first half of the year, resulting in up to three continuous weeks of unanticipated delays of fall product deliveries.

Additionally, factories in Vietnam – where 30 percent of the company’s product is made – were closed for more than two months this summer amid a coronavirus outbreak.

“While we had planned into the known supply chain constraints … the shock to our business persisted longer than anticipated as weeks turned into months,” she said.

The company said it expects to lose between $250 million and $350 million in sales in the fourth quarter.

Other takeaways from Gap’s 3Q earnings report:

Advertisement
  • Comparable sales increased 5 percent and net sales were down 1 percent compared to 2019 pre-COVID levels.
  • Online sales for the quarter increased 48 percent compared to 2019.
  • The company now expects full-year revenue growth to be about 20 percent versus fiscal year 2020.

Read the full earnings report.

Drawing on more than 120 years of history serving the retail design market, VMSD magazine provides retail professionals with the most up-to-date, innovative retail design ideas and industry news through its industry-leading magazine, website, social media channels and bulletins.

Advertisement

SPONSORED VIDEO

Embracing Whole-Brained Thinking in the Design Journey

Strategy needs creative, and creative needs strategy—yep, having both is really the only way of unifying all disciplines with a common vernacular with an eye toward building a strong creative vision that is foundational to the processes. Hear from Bevan Bloemendaal, former VP, Global Environments & Creative Services at Timberland, how to connect the dots between disciplines, claiming and creating a clear differentiation for the brand and ensuring that any asset (experience, product, ad, store, office, home, video, game) is created with intention.

Promoted Headlines

Advertisement
Advertisement

Subscribe

Advertisement

Facebook

Most Popular