Gap is struggling to keep up with its sister brands — we visited the store and saw why

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Gap sold a lot of similar styles to Old Navy for a much higher price. Business Insider/Jessica Tyler

  • Gap is struggling to keep up with its sister stores Old Navy, Banana Republic, and Athleta.
  • Gap Inc.’s sales were flat in the third quarter, but the Gap brand reported that comparable sales were down 7%.
  • We visited a Gap store to see why it’s struggling.

Gap is struggling to keep up with its sister stores.

Gap Inc., the parent company of Gap, Banana Republic, Old Navy, and Athleta, saw flat sales in the most recent quarter, reported in November. Prior to this quarter, the company saw seven consecutive quarters of positive comparable sales growth.

The Gap brand itself is struggling – comparable sales were down 7% in the third quarter.

Gap discounts nearly everything in the store, threatening margins and, ultimately, making shoppers less likely to pay full-price. It also offers a lot of the same styles and quality clothing as its sister store Old Navy, but the prices are much higher at Gap.

“We are clearly not satisfied with the performance of Gap brand. We know this iconic brand is important to customers, and we are committed to taking the bold and necessary steps to ensure that it delivers value to shareholders,” Gap Inc. CEO Art Peck said in the company’s earnings release on Tuesday.

This is what we found when we visited a Gap store in New York City:


We went to the Gap store in the Financial District. There was a 40% off sign in the window, and a 70% off sign outside the door.

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Women’s clothing was on the first floor.

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Generally speaking, it was pretty expensive.

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A simple knit sweater cost about $US60.

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Even t-shirts were a bit expensive.

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A plain grey t-shirt cost $US35.

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Considering the price tag, the styles weren’t that great. Many shirts on display were stretched out and wrinkled.

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It was hard to determine who the store was trying to appeal to.

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A lot of what it carried looked like what you might fight at Gap’s sister store Old Navy, but with a higher price tag.

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Even small products were a bit expensive, like this $US35 belt.

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Gap sold its logo hoodies for $US40, but they were 40% off, as was most of the store.

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Gap also sold sleepwear …

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… and workout gear.

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But some of what was sold as workout gear didn’t really seem suited for that.

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There was a huge sale section with everything from swimsuits, to t-shirts, and denim for under $US15.

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That’s nearly 75% off the regular price of denim.

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Upstairs was a kids’ section…

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… and the prices were about the same as the women’s clothes.

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The men’s section was downstairs, and it was more expensive than the rest of the store. Jeans cost almost $US80 …

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… and a flannel shirt cost $US60.

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However, like the rest of the store, many of the products were 40% off.

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Some products on display were already stained.

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Even though the quality of the clothes at Gap was high, it essentially sold all of the same products as its sister store Old Navy, but at a much higher price.

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It’s clear why the store is struggling to keep up.

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