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The Rise And Fall of Gap

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In late February 2019, Gap Inc. announced plans to split into two separate publicly traded companies, sending its stock soaring on the hopes the new structure will help sharpen its focus and boost sales. The retailer said it would spin off its most successful brand, Old Navy, into a separate, publicly-traded company. With its inexpensive basics, Old Navy has consistently accounted for more than 40 percent of the company’s total annual sales. Its other brands, Gap and Banana Republic, will join much its smaller brands, Intermix, Athleta, and Hill City, to form an as-yet unnamed company. Gap also plans to buy high-end children’s clothing line Janie and Jack and fold that into the new company. Despite the sharp spike on the announcement, Gap shares, which have a market value of just under $10 billion, are up less than 1 percent since the start of the year, and have fallen 20 percent over the past year. Gap CEO Art Peck, who will remain with the executive of “NewCo,” said both companies should benefit from “a sharpened strategic focus and tailored operating structure.” A Gap spokesperson wasn’t immediately available for comment. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Gap The Rise And Fall of Gap
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Text Comments (835)
LCalvertJD (2 days ago)
that's because the quality of the banana republic and GAP products has dropped, I don't shop there anymore, if you buy a GAP t-shirt it lasts two washes and then starts to pill
swave158 (2 hours ago)
No LCalvert, what most don't understand most business do make a profit even when they are successful. You have better odd making money at craps in Las Vegas then opening a business. That is the lie of Capitalism. I once did a study of Railroad in 1890's, the internet of its day. Only 3% of all Railroads in America where breaking even, only 1% of 1% was making a profit.
gravilo pricip (2 days ago)
I visited the States and went to old Navy And was so excited by the deals.....till I went to try the clothes on and a Small there was an extra large in Europe!! I bought from the kids section (I’m 35)
QuietStormX (3 days ago)
In History you can see the GOP are bad for the Public and Businesses the like for them. Effects you pay to lower too.. ;-(
Alan (5 days ago)
I found GAP style outdated since 2007 and their price are expensive for those outdated style and quality
houchi69 (5 days ago)
2:08 That's some serious camel toe...
houchi69 (5 days ago)
2:08 That's some serious bulge...
houchi69 (5 days ago)
I haven't bought any of those brands in like more than 20 years...
swave158 (1 hour ago)
Yes, but not when the company started doing badly. 2001 ad revenues for the entertainment industries cratered across the board. The stock market Tech Bubble hammered the middle class and wipe out a lot of wealth. I saw this happen when Hawaii when the stock market in Japan crater in the 1990's. People just stop spending.
Grim Reaper (5 days ago)
Too expensive. Too white. Last time I bought something from the GAP may have been when I was in high school. That was +15 years ago. The only brand worth something is Old Navy. Banana Republic is garbage too. Too expensive. Not worth it.
Michael Tobin (5 days ago)
The separation of GAP and Old Navy was supposed to happen in 2001, the separation was started and was brought almost brought to conclusion except the GAP wasn't paying contractors. GAP would have failed by the end of 2001 so they stopped the separation because they needed the money. Banana Republic was failing as was GAP unlike what this article states
Magnelan1 (6 days ago)
I think that the main gap problem is their quality. I remember my mom used to buy it for me and my brother because it was clidren resistant and easy to wash. It used to have a certain quality. I still have some of these old items, they are used up but how many times was it used? Nowadays gap items just reach that state after a few washing. Nowadays and with vintage clothing being fashionable, people see how much of a waste of money it is. If casual clothing is not good quality ot looks lame. people don't want to look lama. Why does not gap slow down a little on fast fashionning, and be more reasonable? It wood be good for their image, and therefore for their buisness.
Christopher Ashford (6 days ago)
Wait. you mean, no Banana Republic stores in Central and South America?
The Hood Philosophical (6 days ago)
Mickey Drexler A.K.A. George Costanza
Wasabi Kawasaki (7 days ago)
Abg Neal just bought bought -Gap
Yt Yt (7 days ago)
They need more managers like Chris Farley in drag
Andre Crespo (7 days ago)
This voice is so annoying!
Pablo Escobar (7 days ago)
kathurtado13 (9 days ago)
So what it means is that old navy inc will be the only survivor. ☹😢 sad, I love BR and Gap.
Julian potatoe (9 days ago)
Overpriced junk.
Gambit771 (11 days ago)
First I heard of gap was in the late 2000's. Haven't heard of the other companies until now.
Jimpot Cheung (14 days ago)
Thats a big GAP
Yap Gim Kwee (14 days ago)
The gap stores in my cities have gone missing.
ademir pasinato (14 days ago)
bruh in my school here in brazil lots of people still wear gap jackets
cbracamonte (15 days ago)
Lets blame Britney
John K (15 days ago)
GAP sucks.
Bach YouTube (16 days ago)
The idiots managing Gap risk canceled my $860 order for no real reason and simply lost the sales. Assuming this what happened to another 10,000 users, that’s a loss of many millions for idiotic recruitment of corrupted KYC and online fraud services. It’s just a question of time before GAP is fully bankrupt.
ottomated (16 days ago)
Did everyone forget the horrific gap logo that came out in 2010?
santiago carreño (16 days ago)
2:08 someone has a huge one
Kao Nashi (17 days ago)
Malaysia..twice? lol
640 (17 days ago)
2:08 damn that guy has some serious junk in the frunk.
VuqarIE (18 days ago)
beside the design, quality also sucks
Zoch Buppet (19 days ago)
Why Gap is dying: 1. Didn't change the idiotic "advertise free for me", label branding on everything from the late 80's and 90's when the whole market was already changing by 2001, and absolutely no one was doing it. 2. FAST FASHION. GAP clothing was higher quality, and the stuff was made to last, but it was more expensive Enter the mid 2000's and H & M, fast fashion and manufactured in China and Bangladesh for 1/4 the price that LOOKS similar to the higher quality clothes. Yes I will buy that $60 clothing item when I get a similar item for 25. Most people wouldn't do that, even if the quality was much better.
Zoch Buppet (19 days ago)
Who the BALD DRUNK GUY, that keeps interrupting. I'm cant even understand anything he's saying.
DAZLG (20 days ago)
Gap is the worse name brand anybody can wear that is trying to be on trend its like waking up from a coma after 25 years wearing your same gap sweater.
libertango (21 days ago)
I was buying a lot clothes for my young son from Gap. But they lost me with their kids/boys winter jackets that constantly shed feathers on the sweater even before washing. As I had to buy a new jacket year after year, I grew tired of picking up feathers after feathers. I switched to Ralf Laurent or later Guess when my son grew in size. They are more expensive but the difference in quality was huge.
Sublime Music Channel (21 days ago)
GAP, Old Navy, and Banana--three crappy store brands I've never been able to attach to. Their relentless--actually remorseless--marketing girl ass as a way of luring customers has also never been a draw to me, but rather a turnoff. Creepy.
Bughatii (21 days ago)
Mind the GAP
Neil NJK (23 days ago)
Jim Cramer is a gross human and a terrible orator. Who thought that it would improve this video to have him deliver short lines of dialogue that the primary narrator could have delivered much better?
sniper60605 (24 days ago)
I bought some cool button up dress shirts from there in the mid 2000’s. The kind you could wear out on a Saturday night to somewhere cool. Not the light blue, pink, tired crap but cool white shirts with material that had a cool texture. Never saw anything like them since. Sad.
MuffinREpic (24 days ago)
I work at G.a.p and trust me they are over price even with employee discounts which is 50% off it is still overpriced. I know quality and trust me uniqlo practically have the same quality to even better but way lower price.
Iche (26 days ago)
The Rise And Fall of ZIP
y miller (26 days ago)
Too expensive and unfashionable
y miller (26 days ago)
No one wants to wear a gap T-shirt
yy l (26 days ago)
China is still the profitable market for GAP. And gap is going to open more stores in china at 2019. Thanks for trump, anti American sentiment is widely spread In china. Gap's fall is inevitable.
toonmag50 (27 days ago)
Who cares about a high street retail chain who spends pennies in Pakistan and sells for pounds in the UK? What genuine positive thing do these shops actually do apart from make their owners rich.?
Nik Man (29 days ago)
American crap
Akshay Joshi (30 days ago)
Well the quality is worst!
Gus Marquez (1 month ago)
Get rid of that big ass “GAP” logo on every shirt, and shrink it down then maybe people would shop for the material
Swat (1 month ago)
I can get well tested/washed, better quality and cheaper priced clothes at my local thrift stores here in SoCal. We don’t need more clothes. Less
Princess Zelda (1 month ago)
I grew up in clothes from GAP. This might break my mom's heart.
Soncerae Long (1 month ago)
Their style never changed, if they want to target the young people of 2019 they need to conform to some of the newer trends.
Jason (1 month ago)
Hill City isn't going to save them. $128 for a Men's "Everyday" pant and $78 for an "Everyday" short are placing premium prices on a nonexistent brand. Can't imagine buying this stuff at those price points. Let the deep discounting begin!
JJ (1 month ago)
When the originators of Banana Republic sold out, the decline started. Have seen this sort of event consistently over my lifetime when the founder sells: Celestial Seasonings (tea), Starbucks (ok, so he returned), etc. Whole Foods also has undergone huge changes, and Bezos needs to be careful with how he develops the deli counters. Already see a lot of chemical stabilizers in the prepared wrapped sandwiches. The same story when the new owner announces, "Everything shall remain the same." The first thing that happens is either fires or forces out those with deep knowledge of what works in the industry. Yeah, right, nothing changes. I see monumental mistakes in WF, the biggest being huge inventories, huge floor space, and huge rent. If that does not sound familiar try this one: Sears. Rent is always the killer in any and all businesses, and doctors are not immune. Feel the burn.
Dichotomy & Balance (1 month ago)
I felt problems with the company when no one talked about GAP anymore and Banana Republic's quality had been dropping to levels below J.Crew Factory, which sells online and their predictable 40% sales told you never to buy full price and even then it was over priced. Haven't bought a thing from BR since.
leyuen (1 month ago)
maybe if they didn't sell cheap ass clothes that are overpriced. Also some new styles would be nice.
tricolorTX (1 month ago)
They totally missed the generation move... gap generation became parents, and kids and parents starting buying Abercrombie, American Eagle, and other contemporary brands...
Serge the Blerge (1 month ago)
Baby Boomers. The most despicable generation of all time. In that case I hope the gap dies.
Jon Ultime (1 month ago)
GAP is the exact opposite of cool
Gaurav Jaina (1 month ago)
People got to know they do child labour
Canadian Man (1 month ago)
They wanted to globalize, now they vaporized.
Sportysport (1 month ago)
It's the selling practices that have these companies dying off. How do you expect to sell at a profit when one week their selling at regular price and then the next week those same items are selling for 70 percent off or they come out with a coupon that's like half off. They could just sell at the cheaper price all the time. Also, the quality of the clothing now is real flimsy and cheap making it pretty stupid to spend a lot of money on a wardrobe from one of those place. JCPenney also has the same problem. This new generation growing up don't really put up with that BS and resort to buying things online to avoid the hassle.
Toasty Volvo (1 month ago)
I love Gap so much. I can’t afford it. 😭 yet old navy is garbage and falls apart. I’m a conundrum.
Kayla Schregardus (1 month ago)
GAP is basically over priced Old Navy.
sicilianotoronto (1 month ago)
I didn’t know ex CEO of Shoppers was CEO of Gap for a while. I think I bought a few t-shirts at Gap like 2 years ago. I would purchase more at Old Navy but I don’t like their quality.
Michael S (1 month ago)
Did GAP make clothes or just sell?
Mr Peco (1 month ago)
yo these vids and topics are on point. keep it up my friends
David yu (1 month ago)
I like gap. For the first time I bought two shirts and one pants. Gap has a clean look. Then I bought one banana republic pants and I was thinking wow this is some nice quality pants. No wonder it’s expensive. Maybe gap is losing business because now we know what casual clothing style looks like and there’s other companies doing that too.
Gabi Fuller (1 month ago)
Maybe they shouldn’t put their logo on everything.
AuH2O (1 month ago)
How ironic that the most boring and unfashionable middle-of-the-road clothes chain I can think of started out as a "hip" alternative to old farts.
Dashia James (1 month ago)
I love H&M better than the Gap, BR( Banana Republic) and old navy. Its seems as if Gap & Oldnavy makes the same thing almost every year. Seems as if H&M makes and has new styles almost every year. Also seems as different brand names invest in H&M...!! Knowing what I know now, it's soooo interesting about Gap....!! And what's going on...!!
Eric Wedderspoon (1 month ago)
Gap needs to make their clothes more robust again as i remember when i was a kid - i'd be there in a heartbeat
Eric Wedderspoon (1 month ago)
i bought a vintage Gap rain jacket, its is very well made with sturdy materials! loooooovvvvvveeeee it
Eric Wedderspoon (1 month ago)
Banana Republic is the worest
Sarah James (1 month ago)
I’ve never shopped at GAP half of the reason was price and then the other part was I don’t need GAP across my chest.
Max Gorden (1 month ago)
*Company Man would like to know your location*
DeShawn 'Dawg' BNBG (1 month ago)
8:00 "The company hasn't yet released its 2019 earnings..." Hmm, I wonder why?!
Carlos Davis (1 month ago)
I'd hate to be that guy but did anybody else see I saw? 2:08
Frank Morales (1 month ago)
Figure fitting Ath-Leisure in the age of value ignorant, overweight consumers obsessed with sausage casing (yoga pants) and selphies. Brilliant!
Wayson Wong (2 months ago)
I got bullied for wearing gap
David yu (1 month ago)
Wayson Wong yeah I know some kids that got bullied, but that was when your kids as an adult it’s different.
M.A. Arch (2 months ago)
Miguel Leon (2 months ago)
The boost the price on old navy I’m not shopping their any more their clothes are not that of a quality store power stores like Kohl’s and JCP will dominate
Son Quatsch (2 months ago)
@ 2:09 uh mmmm.
Itz Terro (2 months ago)
In Britain it was pretty popular but now has been replaced by casual brands throughout teens
Craving Morehead (2 months ago)
they need KANYE WEST on deck !!!!!
2HootHoot (2 months ago)
I get all my GAP sweaters from the thrift store
Agent 69 (2 months ago)
they should rename themselve to Zip
Franco Barberis (2 months ago)
They keep selling the same stuff. Their men's shirts aren't even fitted like the ones sold at Express. Khakis are too wide. Basically dad clothes.
Malika Brown (2 months ago)
They need to add more color to their clothing. Everything is jean, khaki, white, black, navy, and the occasional red. These stores speak boring when you pass by......
alan 777 (2 months ago)
Over price brand fake sell that's why you fell....
Emma Joseph (2 months ago)
well today u hv to moove with the time make clothes more relevant even for older generation no 1 wants to be stuk with d same old boxy insuple boxy materials.& please nooo loggos as big as a bridge.i remember when i bought 100% silk cashmeer & cotton clothes @ reasonable price from Gaap hard to beleive but now i go around d shop & say nope nothing 4 me hr.
iambackwithabang (2 months ago)
"they arent trying to explore the Indian market. " i have been using Levis since i was a lil kid. and im 32 now.but i started using Gap only when my brother went to the US in 2010 and have been using it till now.and my baby is clothed in Baby Gap,Old Navy and i use Banana Republic as well. but frankly all of them were brought by my brother in truck loads for me and later on for my kid from the US. instead,growing up, Levis was always available in India and still continues to have stores even in small towns in India. you can hardly find GAP or Baby Gap or Old Navy or Banana Republic stores even in big malls/clothing department stores in India. maybe in a few high end stores may have it.but thats far and few. but unlike Gap-- Levis,Wrangler,Nike,Adidas & even UCB have a strong presence in metro cities, cities and small town shops(which keep a few pieces just in case a customer needs it) in India. pretending to be a premier brand when ur cloth quality is almost the same(i mean gap and old navy and some banana republic pieces have the same fabrics and designs) and not promoting agressively in an emerging market like India is one of GAP Incs biggest mistakes. btw : I have bought several Baby Gap pieces on Amazon India. but havent ever seen a single GAP store in a tier 2 or tier 3 city near me.
Meg C. (2 months ago)
GAP needs to stop selling sweatshirts and tees with GAP all over them. I don't like having brand names all over my clothes.... I like them to look classy and chic. Also, my city only has an Old Navy store (we don't have a B&M GAP or Athleta....we have a GAP outlet, though) and what's nice is that if I buy online from Old Navy, I can return to my local store OR mail in my return which makes returns hassle free. Since I'm tall, I mostly wear Old Navy as their clothes come in tall sizes and are affordable and don't have OLD NAVY written all over them. They sell Old Navy logo tees and sweatshirts it's not all that they sell.
Bruno Seibert (2 months ago)
lower quality.. less sales.
Cousin Drew (2 months ago)
Rise and fall of Reebok?
Frosticious (2 months ago)
2:08 That man is gifted.
M. Le biberon (2 months ago)
guys can u cool it with the background music please
Marcus Aurelius (2 months ago)
GAP has good basics, good for adding basics -- but its fit is not quite right -- the price is a bit much -- much better styling than old navy -- their chinos are excellent
redmotherfive (2 months ago)
Once the stock price is the focus, it’s pretty much all over for the business.
BearMugs (2 months ago)
GAP just lost what they had in the 80's. They need to keep up otherwise they will lose out. They have lost already. I think Old Navy was a big help but not necessarily a good thing because GAP inc was supplying 3 demographics. I believe that was one of their other flaws. Mostly not keeping up with fashion trends and sticking to what got them so big but also Banana Republic and Old Navy were holding them down. Old Navy was carrying 2 companies on it's back. But it's sort of a cycle of buying a small company that does well for a bit before the fashion changes. That's what happened to GAP and in a few years Athleta and Hill City.
Sergio Díaz Nila (2 months ago)
how the decentralized market evolves into oligopolies (centralized markets) even when new options appear, they are absorbed by the big ones before they become a threat.
namirah rasul (2 months ago)
This is karma for not providing living wages n safety to the workers in the factories in 3rd world countries from where they export. Shame on them for being the cause of many ppl's deaths every year
ORoxy 5575 (2 months ago)
OmG! Target is way better than Gap!!! Same pants, better styles. Even my billionaire boss shops for everything at Target, JCrew, and Banana R! Gap close down, please!