Steve Sunnocks has just been promoted to global president as part of a management reshuffle at the fashion retailer. How can he improve Gap’s standing in the UK market?
Since then, the retailer has lost some of its chutzpah. Competitors such as Japanese brand Uniqlo have crept into its market share, providing customers with the same basics and pared down aesthetics as Gap did in the 1990s, and low priced retailers including Primark, Zara andH&M all provide the t-shirts and sweatshirts that used to be Gap’s staple products.
“Gap has lost its foothold in the market over the last 5 to 10 years,” says Verdict analyst Honor Westnedge. “It has been overtaken and overshadowed by the likes of Uniqlo, and consumers can get their basics and casual wear from cheaper alternatives.”
The UK is a notoriously competitive fashion market. It has become far more so over the past few years, but Gap hasn’t quite managed to keep up. The retailer’s prices are still higher than average, but it is failing to justify them with a unique selling point – the brand is not as sharp as it was, and the product is not as high fashion as that of European competitors H&M and Zara.
“They need to justify their prices through quality, detailing or the in-store environment,” says Westnedge. “It needs a unique selling point that helps customers justify the extra expense.”
Gap has been very quiet about its UK sales recently, which itself is perhaps an ominous sign. Westnedge says its comparative strength in the US market, where the brand is still strong, means it can shore up struggling international markets with its huge buying power and strong balance sheet.
But in a world where brands matter more and more in retail, Gap has let its image slide. Abercrombie, Hollister and Superdry have muscled in on its space, and it looks as though an injection of creativity is needed. Westnedge says: “It needs to figure out what’s missing in the UK market, and it needs to reconnect with customers and what they want.”
Sunnucks is well versed in the UK fashion market and is no doubt working out where next for Gap.