Gap is struggling to keep up with its sister brands — we visited the store and saw why

Gap sold a lot of similar styles to Old Navy for a much higher price.

caption
Gap sold a lot of similar styles to Old Navy for a much higher price.
source
Business Insider/Jessica Tyler

  • Gap is struggling to keep up with its sister stores Old Navy, Banana Republic, and Athleta.
  • Gap Inc.’s sales were flat in the third quarter, but the Gap brand reported that comparable sales were down 7%.
  • We visited a Gap store to see why it’s struggling.

Gap is struggling to keep up with its sister stores.

Gap Inc., the parent company of Gap, Banana Republic, Old Navy, and Athleta, saw flat sales in the most recent quarter, reported in November. Prior to this quarter, the company saw seven consecutive quarters of positive comparable sales growth.

The Gap brand itself is struggling – comparable sales were down 7% in the third quarter.

Gap discounts nearly everything in the store, threatening margins and, ultimately, making shoppers less likely to pay full-price. It also offers a lot of the same styles and quality clothing as its sister store Old Navy, but the prices are much higher at Gap.

“We are clearly not satisfied with the performance of Gap brand. We know this iconic brand is important to customers, and we are committed to taking the bold and necessary steps to ensure that it delivers value to shareholders,” Gap Inc. CEO Art Peck said in the company’s earnings release on Tuesday.

This is what we found when we visited a Gap store in New York City:


We went to the Gap store in the Financial District. There was a 40% off sign in the window, and a 70% off sign outside the door.

source
Business Insider/Jessica Tyler

Women’s clothing was on the first floor.

source
Business Insider/Jessica Tyler

Generally speaking, it was pretty expensive.

source
Business Insider/Jessica Tyler

A simple knit sweater cost about $60.

source
Business Insider/Jessica Tyler

Even t-shirts were a bit expensive.

source
Business Insider/Jessica Tyler

A plain gray t-shirt cost $35.

source
Business Insider/Jessica Tyler

Considering the price tag, the styles weren’t that great. Many shirts on display were stretched out and wrinkled.

Gap sold a lot of similar styles to Old Navy for a much higher price.

source
Business Insider/Jessica Tyler

It was hard to determine who the store was trying to appeal to.

source
Business Insider/Jessica Tyler

A lot of what it carried looked like what you might fight at Gap’s sister store Old Navy, but with a higher price tag.

source
Business Insider/Jessica Tyler

Even small products were a bit expensive, like this $35 belt.

source
Business Insider/Jessica Tyler

Gap sold its logo hoodies for $40, but they were 40% off, as was most of the store.

source
Business Insider/Jessica Tyler

Gap also sold sleepwear …

source
Business Insider/Jessica Tyler

… and workout gear.

source
Business Insider/Jessica Tyler

But some of what was sold as workout gear didn’t really seem suited for that.

source
Business Insider/Jessica Tyler

There was a huge sale section with everything from swimsuits, to t-shirts, and denim for under $15.

source
Business Insider/Jessica Tyler

That’s nearly 75% off the regular price of denim.

source
Business Insider/Jessica Tyler

Upstairs was a kids’ section…

source
Business Insider/Jessica Tyler

… and the prices were about the same as the women’s clothes.

source
Business Insider/Jessica Tyler

The men’s section was downstairs, and it was more expensive than the rest of the store. Jeans cost almost $80 …

source
Business Insider/Jessica Tyler

… and a flannel shirt cost $60.

source
Business Insider/Jessica Tyler

However, like the rest of the store, many of the products were 40% off.

source
Business Insider/Jessica Tyler

Some products on display were already stained.

source
Business Insider/Jessica Tyler

Even though the quality of the clothes at Gap was high, it essentially sold all of the same products as its sister store Old Navy, but at a much higher price.

source
Business Insider/Jessica Tyler

It’s clear why the store is struggling to keep up.

source
Business Insider/Jessica Tyler