Gap may withdraw from offline retail market in the UK and Europe due to the pandemic

Foreign media reported that the American clothing group Gap has asked the landlords of its leased stores to terminate the lease, and Gap will set July as the end date of the lease. This means that the brand may completely withdraw from the offline retail market in the UK in July.

As early as October last year , Gap revealed its intention to withdraw from the European physical retail market, planning to close 30% of its North American stores under the GAP and Banana Republic brands by the end of 2023, affecting approximately 350 stores.

At that time, Gap proposed a three-year reform plan, announcing that it was re-evaluating its European business including France, the United Kingdom, Italy and Ireland, and considering transforming 129 Gap brand stores in Europe into cooperative and franchise models by the second quarter of fiscal 2021.

Media revealed that Gap may transform to a business model that combines e-commerce and non-mall offline stores. It is expected that by 2023, 80% of the company's revenue will come from this channel model.

Gap was founded in the United States in 1969 and entered the Chinese market in 2010. According to statistics, the brand achieved sales of US$1 billion through online sales channels in 2018. Currently, Gap has 95 stores in the UK. As of the end of October last year, Gap had more than 1,000 stores in North America, Asia and Europe.

The impact of the epidemic has indeed had a serious impact on all walks of life around the world. Topshop, H&M, ZARA and many other brands have announced the closure of many stores around the world due to being overwhelmed after the epidemic. However, as early as before the epidemic, the American clothing giant GAP had already shown signs of fatigue.

Coupled with the impact of the epidemic, GAP's sales in the first quarter of 2020 fell by 43% to US$2.1 billion, with a turnover loss of US$1.2 billion. Store sales under all brands fell by more than 50%. Although online sales have increased at different rates compared to the past, it is still difficult to offset the overall decline in performance.

It 's not just Gap. The sharp drop in customer flow and high rents caused by the epidemic have left many offline stores of fast fashion clothing brands in a long-term slump. They can only reduce their scale and close inefficient stores to stop losses in time, and then transform to e-commerce to seek new opportunities. Therefore, turning to e-commerce is actually a natural choice for GAP.

E-commerce platform

Cross-border e-commerce market

European Market