Headlines

Mismanagement at Old Navy Weighs on Gap Sales

Executives said the company overestimated demand for its plus-size line

Published

2 years ago

May 31, 2022

VMSD Staff

Mismanagement at Old Navy Weighs on Gap Sales — Courtesy of Old Navy

Courtesy of Old Navy

Gap Inc. (San Francisco) registered a 13% decline in Q1 sales compared to the prior year as the company’s Old Navy banner was left standing with too much unwanted inventory.

Same-store sales for the value brand were down 22% in the first quarter compared to a year ago. The company said Old Navy’s sales “were negatively impacted by size and assortment imbalances, ongoing inventory delays, and product acceptance issues in some key categories.”

According to Yahoo, Gap executives said in an earnings call that “mismanagement of the company’s plus-size line rollout hurt sales” and that the retailer “overestimated demand for larger sizes, which was exacerbated by the lack of stock for core sizes due to supply-chain woes.”

For the quarter, Gap Inc. turned in a loss of $162 million.

It wasn’t all bad news for the apparel conglomerate, however, as its Banana Republic brand surged to a 27% increase in same-store sales.

Gap Inc. expects to open 30 to 40 stores each for Old Navy and Athleta in fiscal 2022. It expects to shutter about 50 Gap and Banana Republic stores in North America during the year.

Related Topics:gap old navy specialty apparel

VMSD Staff

Drawing on more than 125 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.

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