Gap's multi-year performance continues to decline CEO backwaters

Fast fashion brand GAP Beijing APM flagship store opened

Glenn Murphy, chief executive of Gap Inc., also has five months to stop the Gap brand's continued decline in performance over the years.

The first Gap store on Ocean Avenue in San Francisco. For 10 years, Gap has been trying to turn the tide, but with little success. In recent months, Murphy has replaced the chief global marketing chief and chief designer of the Gap brand. He is now back in the water and determined to get Gap's sales back on track during the next Christmas season.

Murphy said in his first interview since he took over the company in 2007. “My sense of urgency is much stronger than before.” In 2011, the company dismissed the chief designer and was eager to see the changes brought about by the changes during the year. result. "The Gap brand is so important that we can't watch sales decline without taking countermeasures."

As the Christmas bells are approaching, the company’s top priority is to solve a major problem: women’s shirts, which are the key drivers that have driven the popularity of Gap products over the years.

Murphy, 49, is praised for improving Gap’s operations and improving profitability. Gap also has Old Navy and Banana Republic brands. However, he has not yet made Gap’s sales in nearly 1,000 stores in the United States improve. Since 2004, Gap's annual sales have decreased by more than $1.6 billion, a decrease of 32%.

On May 19, 2011, Gap announced its earnings report. In early May, the company expects sales to be sluggish in the quarter ending in April, with a “significant” decline in profit margins.

Gap is a mid-range brand in the US retail apparel industry, but this part of the market is in a state of ignorance. It has been abandoned by consumers for many years, because customers either choose low-cost goods or pursue those luxury brands. The size of Gap North America has continued to shrink, and now accounts for only a quarter of the company's total turnover. However, Murphy needs North American divisions to maintain a good state of operations in order to provide support for its major action - the Gap to overseas markets.

The long production cycle of the product is like a swamp, making Murphy feel struggling. As chief executive, Murphy has long been instilling the importance of speed to his senior management and is committed to reducing bureaucratic behavior and pushing garments to stores faster.

In 2010, Murphy discovered that a product designed and manufactured by the company's denim laboratory in Los Angeles was first sent to a distribution center a few hours away by car and then shipped back to a test outlet in Los Angeles.

When Murphy went to the tour, he said to the staff there, “What are you kidding?” He called several times, abolished redundant transport links, and let the design team “get the clothes out and ship them directly to the store. ."

Although emphasizing the importance of change, Murphy has been insisting on not replacing chief designer Patrick Robinson for several years. Even if all the evidence is increasingly showing, Robinson is hard to copy past success to denim clothing. Up - Gap relaunched denim products in the fall of 2009. In May 2011, Murphy eventually broke up with Robinson, but Gap stores have been filled with Robinson-designed clothing. Due to the long production cycle of ready-to-wear garments, stores will not be available until the end of the year. Gap was forced to replace the store's products before the Christmas season because Christmas sales accounted for 30% of the total sales.

Although Murphy admits that Gap's women's clothing has become "boring", he is unlikely to be an ideal candidate to help Gap out of fashion.

Gap's former chief executive, Miland "Mickey" Drexler, was called "Merchant Prince" and his unique vision made Gap a household name. Murphy does not have experience in the garment industry. He is a Canadian. He first worked for a chain of bookstores in Canada and then headed Canada's Shoppers Drug Mart Corp. with more than 1,000 pharmacies. Join Gap.

The Gap current leader is not an industry expert, but a detail-oriented business operations manager. Murphy has to break 15 pairs of shoes every year. He has to travel several times a month and shuttles between stores. Every time Murphy goes on a business trip, company management must warn newcomers who are unfamiliar with the situation to bring good food because Murphy likes to eat while walking instead of going to the restaurant for lunch.

For more than a decade, Gap has been content to launch T-shirts and khakis in months of production cycles; and some so-called fast-fashion brands can launch new fashion clothes in just a few weeks at a much cheaper price. .

Murphy is committed to reducing the production cycle, because the production cycle is too long will lead to the product can not keep up with the fashion trend, and extend the wrong product to bring adverse impact. He has reduced the time it takes for garments to go from the factory to the store by one-third. The company also established a new product fast track, shortening the production cycle of some key products to less than four months.

These improvements are being tested in real life. Over the past few weeks, Murphy has devoted most of his time to the Gap team in New York and has concentrated on improving the various autumn outfits that he has introduced to stores in August. In addition, the first batch of products entering the store during the Christmas season was at the beginning of November and became the focus of the company's attention.

Murphy said that not all product lines need to be big-handed. For example, sales trends in the children's wear department and baby department are very good, and Gap Body's home wear collection and men's wear are also improving. Denim clothing is one of Gap's key products, and sales of men's and women's jeans are also good.

This is not the case with women's tops. Murphy sat in the rest area of ​​a large Gap store in San Francisco and complained that Gap's women's tops were "dark and dark, and they were just as bright as cosmetics," including the pale pink and beige lines used in the Gap high-end series. Although these colors look fashionable in fashion magazines, they are inconsistent with Murphy's emphasis on the "optimistic" style of the Gap brand and are not very appealing.

Now, there is a disturbing product on the Gap shelf: T-shirts with chicken wing sleeves, this sleeves reveal the roots of the arm, but many women are not confident.

Murphy patrolled the rows of T-shirts and tank tops and said: "This is not enough. It must be changed. Now it must change."