Many retailers are rethinking, or shutting down, ancillary concepts as the recession clamps down on consumer spending. So it's pretty shocking to hear rumblings that Gap
According to Women's Wear Daily, Gap is opening an accessory concept called Edition by Banana Republic. A prototype store has apparently opened in Gap's home city of San Francisco. The concept is targeting a slightly more downscale price point -- 80% of the merchandise in the store is tagged at less than $100.
This announcement is somewhat shocking, since Gap still has a lot of turning around to do in its older concepts, especially its still-struggling Old Navy stores. Not too long ago, the retailer watched another new concept go belly-up as it was forced to shut down Forth & Towne.
As Gap looks to open a new brand, many retailers are shutting down concepts. Tiffany
Gap has never been high on my list of retailers to consider investing in; it just hasn't really been able to turn around its concepts and lure shoppers back into its doors. What little progress it has made seems to be related to cutting costs, rather than becoming an exciting and vibrant retailer again.
Starting a new concept amid shrinking consumer spending not only seems foolhardy, but also sounds like a distraction that this company's management doesn't need. Gap has so much more to accomplish with its existing brands.
One thing Gap does have going for it is a large stash of cash ($1.7 billion) and virtually no debt, which gives it a survival edge against many of its debt-ridden rivals. However, I think Gap's shareholders would be better served if it could turn around the concepts it already has, rather than try to start new ones.
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