The ubiquitous clothing retailer Gap has been filling closets with jeans and khakis, T-shirts, and poplin since the Woodstock era. The firm, which operates about 3,500 stores worldwide, built its iconic casual brand on basics for men, women, and children, but over the years has expanded through the urban chic chain Banana Republic, family budgeteer Old Navy, online-only retailer Piperlime, and Athleta, a purveyor of activewear. Other brand extensions include GapBody, GapKids, and babyGap; each also has its own online incarnation. All Gap clothing is private-label merchandise made exclusively for the company. From the design board to store displays, Gap controls all aspects of its trademark casual look.
The Gap rings up about 85% of its sales in North America. Asia, including Japan and China, is the retailer's second biggest market accounting for about 8% of sales, followed by Europe (the UK and Ireland, France, Italy) contributing about 6%. Gap has 300-plus franchise stores across Asia, Australia, Eastern Europe, Latin America, the Middle East and Africa.
Sales and Marketing
The company communicates with consumers mainly through television and print advertising. Its advertising expenses were $639 million in fiscal. The Gap has expanded its digital capabilities and the company now offers services such as order-in-store, reserve-in-store, find-in-store, and ship-from-store.
The Gap reported $16.4 billion in revenue for fiscal 2014. That was an increase of $287 million compared to the prior fiscal period. The company claimed a net income of $1.2 billion in fiscal 2014, which was a decrease of $18 million compared to its fiscal 2013 net income.
However, even with the decrease in net income, the company ended fiscal 2014 with $2.1 billion in cash on hand from operations.
Gap is working hard to get its groove back in the US and to expand its brand globally. Going forward, the company plans to begin opening Old Navy stores outside North America and add more stores in China (the source of about 25% of its clothing).
On the fashion front, color has made a comeback at main chain Gap stores, after years of uninspiring fashions in shades of black, white, and gray. Gap continues to promote its lesser-known online-shoe brand Piperlime and Athleta, a direct-marketer of women's active wear.