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Gap To Fire Thousands, Close A Quarter Of All Specialty Locations
Either the winter that is coming will knock the socks right out of the pre-quadruple seasonally adjusted GDP and the Gap knows all about this, or the much-hyped economic recovery, of which the US is supposedly in the 6th year now, has been nothing but a myth and a lie.
Moments ago, one of the biggest clothing retailers in the US confirmed the worst nightmares about the state of US consumer spending, when it reported that it would shut down over 25% of all of its specialty stores in the US, or about 175 (of which 140 will be shut in the current year), leaving the firm just 500 specialty locations and 300 outlet stores. And, in addition to the thousands of job terminations these closures would entail, the company will further fire another 250 in its headquarters.
Why? As the company admits: "To Increase Productivity and Profitability", to "deliver more consistent and compelling product collections and engage customers across all channels", because “Our customers and employees want Gap to win."
Well, maybe not the employees, and certainly not those that are not only about to get a modest severance package, but will make the BLS's role of painting the mass terminations "recovery" that much harder.
Oh well, that's what double, triple, quadruple and so on seasonal adjustments are for.
From the press release:
Gap Inc. Announces Strategic Initiatives to Increase Productivity and Profitability of Namesake Brand
Gap today announced a series of strategic actions to position Gap brand for improved business performance and build for the future. Following a thorough evaluation of its business and operations, Gap plans to right-size its specialty store fleet and streamline its headquarter workforce, primarily in North America, as part of the comprehensive effort to deliver more consistent and compelling product collections and engage customers across all channels.
“Returning Gap brand to growth has been the top priority since my appointment four months ago – and Jeff and his team bring a sense of urgency to this work,” said Art Peck, Gap Inc. chief executive officer. “Customers are rapidly changing how they shop today, and these moves will help get Gap back to where we know it deserves to be in the eyes of consumers.”
In order to drive productivity improvements and showcase the brand in the most successful locations, Gap will close about 175 specialty stores in North America over the next few years, with about 140 closures occurring this fiscal year. These changes will not impact Gap Outlet and Gap Factory Stores. In parallel with these moves, the brand will close a limited number of European stores during this period.
Following the fleet optimization effort, the brand will continue to serve North American customers through about 800 Gap stores – comprised of 500 Gap specialty locations and 300 Gap outlet stores – as well as its dynamic online channels, better reflecting the way today’s customers shop across specialty, outlet and online. The brand will continue to have a robust global presence in more than 50 countries and with about 1,600 company-operated and franchise locations globally.
“Our customers and employees want Gap to win,” said Jeff Kirwan, global president for Gap. “We’re focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores."
Since Kirwan was appointed to lead Gap in December 2014, he’s rebuilt the leadership team and implemented an aggressive agenda designed to strengthen the brand and successfully compete on the global stage. The team is driving towards a clear, on-brand product aesthetic framework focused on optimistic and elevated American style, while also rebuilding the brand’s product operating model to increase speed, predictability and responsiveness, and enable greater competitiveness.
To speed decision making and responsiveness, Kirwan also announced decisions meant to align Gap’s organization in support of its new product operating model. This will result in the reduction of the brand’s headquarter workforce, primarily in North America, by approximately 250 roles during fiscal year 2015.
Kirwan added, “These decisions are very difficult, knowing they will affect a number of our valued employees, but we are confident they are necessary to help create a winning future for our employees, our customers and our shareholders.”
The company estimates an annualized sales loss of approximately $300 million associated with the store closures. Additionally, the company estimates one-time costs primarily associated with these actions to be in the range of approximately $140 million to $160 million, of which about $55 million to $75 million is non-cash. These costs are expected to be recognized primarily in the second quarter of fiscal year 2015 and include lease buyouts, asset impairments primarily related to the Gap fleet, inventory and fabric write-offs, and employee related costs associated with organizational changes.
The company estimates annualized savings from these actions to be approximately $25 million, beginning in 2016.
Excluding the estimated pre-tax costs of $140 million to $160 million referenced above, or approximately $0.21 to $0.24 per diluted share, the company is reaffirming its guidance for fiscal year 2015 to be in the range of $2.75 to $2.80. This guidance is provided to enhance visibility into the company’s expectations regarding its ongoing business excluding the Gap brand optimization effort.
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Something wrong here....isn't the economy rebounding?
ha.. right "US economy firing the after burners .."
http://hedgeaccordingly.com/2015/06/u-s-economy-firing-on-all-cylinders-is-a-rate-hike-next.html
I told you I was sick.
Perfect! Sounds like more students will be going back to overpriced schools to train for fake-ass phantom jobs.
Time for more Gender Studies majors...
Mind the Gap!
Radio Gap will be sadly missed.
The Amish would never shop there. It's a very vulgar name. GAP. Might as well call it camel toe.
I couldn't think of anything smartass to say, so, I'll let this song say it for me...
https://youtu.be/__VQX2Xn7tI
May the man who said “Our customers and employees want Gap to win” get his balls caught in a blender.
Green up arrows to the moon for you tbd108.
:)
ROFL
Nevermind the Gap your Screwed Anyhow's
Die Faster 22
Your ass
You're screwed (you are)
capiche? Your post means you're mistaken.
<sarc>No offense intended, I'm sick of this shit. Go to colage</sarc>
At some point the sheeple will go to the streets to protest and get slaughtered by the militarized police forces. The culling will begin shortly...
There will be no protests, the frogs will continue to boil until their well done
You don't want them well done. As soon as the skin separates from the body, she's done.
Goed eten!
I think they are already "well done."
Not necessarily so.
Maybe for many it is true, but a well organized fast moving guerrilla campaign using old school methods may have a good chance of winning. Think ISIS and see what they are able to get away with as well as some of the other groups out there against well equipped and trained military forces.
As long as they are ruthless, they will win.
Target the Govt. stooges families, which I'm sure ISIS does.
The BLM couldn't get home quick enough after those addresses were put on the internet.
BLM addresses? Was that at Bundy Ranch? A lot of those BLM agents in cammo were mercs/Xe/Blackwater/Acedemie/DOUCHBAGS Merc's R Us.
The one "BLM" guy at the gate at Bundy was in videos in Afghanistan spewing shit. A really ugly MF'er too who could only get it if he paid for it.
There will be no riot to speak of unless large parts of the regular armed forces step up to the plate at some point to counter the fascist police apparatus whose militarization and people=enemy conditioning is about to be completed soon.
Didn't the Gap sell a lot of millenial f*g wear for metrosexuals? Maybe they need to sell more hipster wear.
F the Gap, F millenials and baby goomers.
Ouroboros.
.
The snake is eating its own tail...
.
Evil is dysfunctional.
Mind the Gap! Outside of the frothing at the mouth neocon TPP Beltway crooks, everyone knows the U.S. economy is being savaged by the Wall Street robber barons.
No worries, they are hiring in Hong Kong. But no one is buying.
Can Gap not seasonally adjust its sales and profits as the US does so effectively all the time?
“Our customers and employees want Gap to win."
A fine example of Orwellian doublespeak.
Chart Of The Day: Retail Sales (ex Autos) Turn Negative For First Time Since 2009
by David Stockman • June 14, 2015http://davidstockmanscontracorner.com/chart-of-the-day-retail-sales-ex-a...
Apparently a GAP in earnings.
The giant H&M store across from Bryant Park in NYC is closing also. Most of the larger store fronts are being taken over by ever more luxury brands.
Collapses always start at the margins...
k mart sears jcp, going going gone.
Green shoots
Now that's a recovery you can believe in.
Gap is crap.
And I have a high school acquaintance that was a VP there.
Yeah, I've read that their clothing quality is crappy.
Dollar stores should start selling clothing..good bye and good riddance to the rest of the Gap brands and all third world garbage clothing we are being sold.
Another summer to remember
Please, for the love of God, shutter JC Penney.
Hey, I shop there. Everything is not made in China. T-shirts, knit shits, cargo pants, and shorts at good quality for the price. I should go to Ralph Lauren and pay $90 for a knit shirt to BBQ in?
No worries, the door began closing when JC Penny hired Ellen DeGeneris to talk down to and mock their own customer base.
Not too much longer before it finally shuts and they put a chain and lock on it.
GAAP...
On the other hand... SUPERSIZE XXXXXXXXXXXXXXXXXXXXXL is opening 5000 new shops across America and is hiring!
Yep, seems to be one opening right next door to The Hideous Ink Superstores everywhere I look.
The newly fired at the GAP will be able to spend more time with there families. Get out to shop more, vaction and stuff like that... so it's a win.
SNAP!
You forgot "write poetry while on welfare."
No more "job lock" as Pelosi says. Forward
I never bought anything at the GAP.
Fack 'em.
Next up...stock buybacks!
Colt Defense, 179-Year-Old Gunmaker, Files for Bankruptcy
15 June 2015, by Tiffany Kary (Bloomberg)
http://www.bloomberg.com/news/articles/2015-06-15/colt-defense-179-year-old-gunmaker-files-for-bankruptcy
bonus time
I'm not sure people can appreciate just how incompetent you have to be to have lost money in the largest bull market in the history of firearms; it should have been like running a candy store at a fat camp.
Understatement of the year!
Kind of weird because it was a huge bull market for guns but it has appeared to have cooled for now. I never thought the USA could absorb 80 million new guns in the past 5 years in a country where there are already about 300 million guns.
The other things is there are now dozens of AR makers. Unless you have some nice carry guns too then things may get tough.
Was this a union operation? Cheapskate corporations just don't price that in anymore, because they bleed too much out the side door. I'm sure China could make a profit with the tooling.
Even the new GAAP, can't save GAP...
Peck ain't hurtin', that much is certain.
I'm pretty sure the modest severance will be 0.
Yup. That's about as modest as it gets.
they'll throw a you a gay striped t-shirt
Old Navy and Thrift stores have stolen all the biz away.
Old Navy is GAP.
Same as the store named after our modern day economy: Banana Republic.
Outlet malls are becoming dinosaurs. So are retail outlets.
When was the last time anyone actually went to a Gap, Best Buy, Sears?
Shop online and find the lowest price. No sales tax? Even better. Free shipping? Better yet.
Went to Best Buy a couple of weeks ago to drop off some old tube TVs, dead computer, and vcr, best place to get dump old electronics as the land fill charges you up the wazzoo for them. Looked around a little, didn't buy anything lol.
Hey, thanks for that tip. We can't throw out anything like that either around here. There's a place that takes electronics for free, but they charge $10. for any CRT box, so you just saved me $30. Thx!
"Best" Buy still sells CD's and Sony walkmans from the 90's. No idea how they're still operating. I see people in the stores, but never someone at the register.
Big Bizness suck Obola, CON-Gress, their z-oligarch bosses and MIC. Let em eat cake.
Where will all the Ancient English majors work after grad school?
Stop producing garbage clothing, is that a strategy they have considered?
There are no big bonuses in that! /sarcasm.
I hope all these stores get flushed.
Yep. The taxes will just shifted to the residential folks, many of whom no longer have jobs. Everything goes to the banks, suckers!
Who needs employees? Just use cheap fed money to buy-back shares. Or IPO a new company and make billions. Print forever and make assets keep going higher.
Related to the other story about fat Americans -- if 20 people in Bangladesh equals 12 Americans, maybe the solution is to stop making their too skinny clothing in Bangladesh since they obviously do not know what Americans look like in that country!
Why worry about The Gap when Sears stores are packed with customers? In fact, their parking lots are FULL every business day. That's right, bitchez, it's a recovery!
Notice how the CEO mentioned the 'book-end' brands are doing ok. This is just synonymous with the middle getting eviscerated. It is a stark reflection of the overall economy and society.
J.Crew is also struggling (and it is at a higher pricepoint than gap and has more affluent clientele).
That said, Zara and Uniqlo are killing Gap (the overall company) so some of this is strategy failure as well.
Can't anyone do something about this new round of lay-offs? Maybe pass a law or something that makes all these retail store closings, dying malls, and lay-offs illegal without some sort of .gov oversight? C'mon! I mean, think of all the lives that will be disrupted due to the lack of real, part time jobs offering no benefits.
How will America finish recovering from itself?
Solar powered manufacturing tent cities. Folks sitting in long rows, putting up with stinky people next to them. Have to bang out that stuff real cheap to compete.
Who the fuck buys clothes anymore? Aside from the underwear and socks I had purchased last month I haven't bought a damn thing in two or three years.
And I only did that because I was down to zero pairs of underwear without gaping holes in them, and only a handful of mismatched socks.
$45 for some jeans? Screw that! No wonder these stores are going out of business.
+100
These stores are for a growing middle class that no longer exists and will never exist in our lifetimes. Feral Trayvon Amerika.
True dat.
who buys underwear anymore?
AFAIK - warner buffett owns fruit of the loom and hanes.
I seldom buy clothes, but did last year for work. Now I have worthless "older" clothing sitting in my closet.
Most of the stuff on the rack looks 80% worn out before you get it out of the store. "Stone washed"? Like tumbled with concrete blocks for a few hours. Yep, we've pre-beat the Dickens out of it for you, saving the trouble of you having to do all the work to wear out your clothes yourself!
How do you like them "green shoots?!"
Liberty is a demand. Tyranny is submission.
Well let's see, last year The Gap raises minimum wages of all its employees in a bid to please progressives. Now they hit a rough patch and start letting people go. Can't be correlated events, can they?
Check the financials. Gap has been Buying-Back and "adjusting" the P&L. Nice bonuses all around (at the top), and nice insider dumping (on the board). Business as usual.
Though, sad to see a quintessential depression industry (Old Navy) so damaged by the greedy art collectors.
Looks like they finally "fell into the gap":
https://www.youtube.com/watch?v=CCEBoOy0ne8
Some of that bullshit verbage in their press release is so out there it sounds like a parody. Is this an Onion piece?
It's an exciting race to the bottom of the barrel ... bang, fk off and die!!!
Reinterpreted :
Gap plans to down-size its specialty store fleet and stripmine its headquarter workforce, primarily in North America, as a response to delever from consistently collapsing customer consumption capacity across all channels.
The strong dollar has destroyed GAP's ability to export their American-made hoodies and tees. Plunging oil prices and layoffs in the frack fields have taken away their vital customer base of oilfield roustabouts. Strong job gains elsewhere have driven their labor costs sky-high. The frigid winter negatively impacted GAP baseball cap sales.
There's really nothing GAP management could have done differently faced with that unforeseen quadruple whammy.
i had to drive a friend who is in town for some management training to my local mega expensive shopping mall that is choke full of super expensive boutique European fashion stores. To my surprise i had to spend about 20 minutes to locate a parking spot. The last time when I was at the Saks 5th Ave, a major anchor store there, was about 15 years back, it wasn't as crowded as its now. The whole place looked like it was for Black Friday. Customers are buying shit like crazy when an average LV bag is about 1000 Franklins and a women's blouse by a big time French designer at three grand selling like there is no tomorrow, fucking unbelievable. I guess QE has made lots of MOFOs pockets full of super easy money. Am i just jealous? No, fuck no. perhaps it's super great time for the haves until it's not.
Ahhh! Life is good. Soon US will be downgraded to junk country.
"Fall into the Gap"..ing maw of the Depression.
Where's the mainstream media on this one? I guess the consumer needs to "come up to speed" on changing styles and season prior to spend, spend, spend?
Guess they're FKUCed.
The only time anyone goes to these stores who doesn't live in a top top 10% income area is when they have fire sale give aways
Working at a department store like GAP or whatever in Bergen county, NJ or Fairfield county CT (Greenwhich, CT) is alot different than the GAP store in some suburb of Columbus, OHio