Apparel stores were closed for around three months due to the coronavirus pandemic, and while Old Navy welcomed shoppers back with huge discounts on just about everything, sister store Gap has a different plan for unsold merchandise in 2020. . .
Try to sell it next year.
Gap will put unsold seasonal merchandise into storage until 2021.
Gap was closed due to COVID-19 while they would’ve been selling spring and summer apparel. While a number of retailers either had big-time clearance sales or offloaded unsold merchandise to discount department stores like Ross, TJMaxx, and Burlington, Gap executives said on their June 4 earnings call that they’ll be storing seasonal merchandise until next year.
Although you can’t expect the kind of clearance sales Old Navy is having right now, analysts believe the old merch will be discounted in 2021.
They’re doing this in order to pay for holiday season apparel.
Retail analysts told CNN that by lowering future demand for spring/summer apparel, they’re freeing up finances to be able to have enough apparel for the holiday season, which is when the company makes the most money.
Gap is donating some of their unsold inventory to charity.
They’re not planning to “pack and hold” all of the unsold merch. Gap is planning to donate a portion to charity.
Before Gap puts summer and fall fashions in storage, they’ll try to move product by using local stores to fulfill online orders — rather than placing new warehouse orders.
Tommy Hilfiger and Calvin Klein may also “pack and hold” inventory.
PVH, the company that owns the two brands, is also considering storing unsold inventory, to be sold next year.
Before the end of the year, Gap will shut down their Hill City athletic brand.
As Gap Inc. struggles to make ends meet, they announced they’d be shutting down their Hill City men’s athletics brand “over the course of the year.” The brand has only been around since late 2018.
They don’t have any physical locations, but rather than try to keep growing the brand, Gap plans to phase out gradually, and have other company stores absorb some of the Hill City styles — starting with Banana Republic.
Meanwhile, Gap is preparing to close 230 stores before February 2021.
Gap’s been under financial stress for the last five years or so — including a record $932 million loss — all while sister company Old Navy enjoyed relative success.
Gap Inc. had plans to spin off Old Navy into a separate company, but the coronavirus pandemic put an end to that. It doesn’t mean that the parent company won’t cut their losses with Gap in order to be profitable.
Gap is just one of our 12 Retailers That Might Not Reopen After Coronavirus.