Gap Inc, the humongous discount clothing retailer , which runs the Gap, Old Navy and Banana Republic chains, detailed plans on Thursday to close 189 locations, or 21 percent of its namesake Gap stores in the U.S., by the end of 2013.
U.S. But even before the U.S. economy took a turn for the worse, tts sales in the U.S. have eroded considerably. In an interview on the eve of Gap’s investor day on Thursday, President of Gap North America Art Peck told Reuters that the company had lost its way by straying from high-quality jeans and other basics. “What’s expected of us is pretty clear,” Peck said. “I think it’s been us who’ve kind of wandered around.” Peck joined Gap in February following a management reshuffle.
This news is interesting to marketers because it shows that even though the economy is doing worse, and in theory people would be looking for discounts, companies like Gap are actually doing worse. Why? Its interesting to note that earlier this year EBAY actually had a net income last year of $476 Million on revenue of $2.55 Billion. That’s an increase of 20 percent from the previous year.
That news is extremely interesting for marketers because it shows that while people used to shop in discount outlets during bad times, they are now turning to the internet. That means that marketers have an opportunity to offer discount products first, because even while people have less money, they are still shopping ONLINE. Even with the economy, the growth of people getting online still raises each year and is considered an essential part of any household. Comparison shopping is made easier, as is any type of deal shopping.
Is this going to be a trend for more and more brick and motor discount outlets closing, making room for online deals?