Don't Expect Discounts At Gap This Fall

Gap store hong kongREUTERS/Tyrone SiuGap sales staff prepare to open at Hong Kong’s first Gap Store before its opening in the financial Central district November 25,2011.

Gap shoppers have come to expect deep discounts and promotions.

But JPMorgan analysts believe that Gap will stop offering 30% to 50% promotions on items this fall.

The company is “optimistic” that it will be able to sell products at full-price this fall, according to a report led by analyst Brian Tunick.

Gap’s new strategy, which includes stocking less inventory and trying a new marketing agency, will probably drive sales, according to the report.

The analysts also believe that Gap’s fashion sense will improve under creative director Rebekka Bay.

While cheaper, fast-fashion companies like H&M are gaining popularity with shoppers, they are unlikely to threaten Gap, according to Tunick.

“The company still believes they can offer value in other ways (such as testing a new loyalty program),” the analysts write.

Gap is also testing programs that would allow shoppers to find and pick up items in stores.

Tunick has previously written that Gap has trouble being consistent because of its price points.

The chart shows where apparel retailers rank in terms of fashion and value.

In every category, Gap is simply average.

The company isn’t the cheapest, like Old Navy and Uniqlo. It isn’t renowned for its basics like Everlane, or super-fashionable like Zara.

“Another ongoing concern around the Gap brand is where it fits in the fashion-value equation and who the core customer is, as the product and pricing for the brand has been inconsistent and confusing over the past decade,” JPMorgan analysts wrote.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.