Amazon Might Be ‘Plugging The Department Store Gap’ With New Channels | CNBC
Gap CEO would use Amazon
Mallory Schlossberg/Business Insider Gap Inc. has been struggling.
But CEO Art Peck is aware of a possible solution to fix the problems, and that's to use Amazon.
"To not be considering Amazon and others would be — in my view — delusional," Peck said at Gap's shareholders meeting on Tuesday, according to Bloomberg, after he was asked if the company would ever use Amazon to reach shoppers. "We are always considering all of the opportunities beyond our traditional mix of channels and stores. Amazon is certainly one, and there are others as well."
It's no secret that Amazon is a huge threat to traditional mall-based retailers and department stores, and that threat is only getting more ominous.
According to a recent Morgan Stanley report, Amazon is the second-largest apparel retailer, with only Walmart ahead of it. It's posed to hold the biggest share of the apparel market by 2020, the report notes.
Morgan Stanley highlighted how retailers that utilize in-store experiences — like Victoria's Secret or Lululemon — might be safe from Amazon's swift ascent to prominence, as might luxury retailers.
Traditional retailers need to adapt, particularly as malls decline.
Since last year, Peck has pinpointed spring 2019 as the company's turnaround.
"The team has been focused obviously on spring of 2019 and I'm confident that they have been doing the right work to get the business back on track as we get into next year," Peck said on an August 2015 earnings call.
Now it's spring 2019, and things aren't looking great. Preliminary first quarter results revealed that Banana Republic's sales had plummet ted 11%, and Old Navy — once thought of the company's saving grace— saw comparable sales nosedive 6%.
Fortunately, things are looking better for the company's namesake brand. Gap's sales were down 3% in the first quarter, versus 10% this time last year.
Video: Gap CEO Art Peck on Brand Portfolio and Online Business
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