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2018 Retrospective: Problems with Gap Brand, Overseas Growth for Zumiez
It’s been a solid year financially for Gap Inc., which calls itself the largest specialty retailer in the United States.
But there’s been some turbulence in 2018 for the San Francisco–based retailer’s namesake Gap brand. For its third quarter, the Gap division’s same-store sales declined 7 percent, said Art Peck, the president and chief executive officer of Gap. “We are clearly not satisfied with the performance of the Gap brand. We know this iconic brand is important to consumers, and we are committed to taking the bold and necessary steps to ensure that it delivers value to shareholders,” Peck said.
The statement may not be the best news for Neil Fiske. He was appointed president and CEO of the Gap brand in June for his skills and experience in turning around brands. Before joining Gap Inc., he served as the chief executive of the surf giant Billabong International.
Same-store sales for Gap Inc.’s third quarter, when taking into account its brands Old Navy, Gap and Banana Republic, were flat compared to a 3 percent increase over the same period last year. Net sales were $4.1 billion compared with $3.8 billion the previous year.
In October, Gap Inc. released a performance men’s apparel brand called Hill City. Noah Palmer, Hill City’s general manager, said the new line could be worn on a hike or to dinner.
Seattle-area retailer Zumiez Inc., which has 610 stores in the United States and 93 stores overseas,has long been a solid retailer selling action-sports apparel at malls. Its third quarter earnings results showed that net sales were $248.8 million compared with $245.7 million the previous third quarter. Same-store sales for the quarter were up 4.8 percent.
Zumiez’s chief executive officer, Rick Brooks, said that the retailer hopes to expand to Canada, the European Union and Australia in the near future.
Retail analyst Jeff Harbaugh, who follows Zumiez, said the expansion plans could be that the retailer might be thinking it has run out of opportunities to build more stores in the U.S. But Zumiez continues to think about looking for new channels to expand domestically.
