GAP Product Quality Performance Both Worrying, A Year To Close 200 Stores

Recently, the General Administration of Customs issued the information on the safety risks of imported industrial products in July 2018.

The 7 batch of garments 570 products were found to be damaged during the inspection and quarantine at the port of entry.

This is not the first time GAP has boarded the blacklist.

In June this year, the General Administration of Customs issued 5 batches of GAP brand of imported industrial products safety risk information.

They were destroyed, including 6000 cotton knitted baby pants and 115 knitted baby knitted garments made from Indonesia, and the risk of skin damage was caused by pH and dry color fastness.

It also includes 3860 cotton knitted boys T-shirts from Vietnam, 783 cotton knitted baby shorts, and 159 pieces of knitted baby shorts.

There are some problems such as unqualified color fastness to wet rubbing, poor color fastness to saliva and unqualified dry rubbing fastness.

On September 2017, the Shanghai entry exit inspection and Quarantine Bureau concentrated on destroying 8 large quantities of imported unqualified garments, involving 400 batches, totaling about 55 thousand pieces, with a value of more than 30 US dollars, and GAP ranked among them.

In May 2017, the General Administration of Customs issued the unqualified information on imported industrial products. GAP failed to check the color fastness. The entry port had destroyed the above garment.

Insiders pointed out that the failure of international brands is not uncommon, which is also due to the low penalty level in the country.

At the same time, many big factories are distributed in developing countries. When the output increases, the difficulty of manufacturers' control is also increasing.

Not only does product quality worry,

The performance is also worrying.

The first quarter of 2018 showed that as of May 5th, GAP group's operating income was 229 million US dollars, down 9.84% compared to the same period last year.

Comparable sales of GAP group's GAP brand declined by 4% compared with last year, Old Navy Global rose 3%, Banana Republic Global rose 3%.

Teri List-Stoll, executive vice president and chief financial officer, said: "no matter how much pressure we face in the first quarter, our annual guidance is positive."

As of the first quarter, GAP group has 3617 stores in 45 countries, closing 39 stores in the first quarter.

Among them, there were 1281 brands of GAP, and 11 stores were closed in the first quarter.

It is noteworthy that, in May 2018, GAP group CEO Art Peck took the initiative at the annual general meeting to admit that its brand operation problems had led to a slow recovery in the sales performance of the brand, but it had nothing to do with product design and quality.

Art Peck revealed that despite the closure of nearly 100 stores last year, the GAP brand will continue to close 200 stores in the next year, but plans to add 60 new Old Navy stores.

In view of the fact that Asia has become the second largest market in the Gap group after the United States, GAP regards China as one of its breakthrough points, trying to further open up online and offline competition with other fast fashion brands and e-commerce providers for young consumers.

There are people in the industry who believe that GAP is unlikely to revive its past glory. However, under the leadership of Art Peck, who only believes in strategy and data, it is only a matter of time before the recovery is realized, but the premise is that GAP must be recognized by young consumers in products and creativity.

GAP group's two quarter 2018 results will be issued in August 23rd and will be followed up in real time.