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On Thursday, Gap reported declines in quarterly sales and profits, and according to the Wall Street Journal, Gap CEO Art Peck said that the retailer was hard at work trying to copy the approach used by fast fashion brands. Like H&M, Gap plans to test small runs of merchandise in its stores and then find out what's selling and buy more. It's an approach that worked for Old Navy, which really took off when H&M's former global sales chief Stefan Larsson joined the company as Old Navy's global president.
"Old Navy’s consistency continues to be a thing of beauty. It sits on a platform of product process that they have built over the last couple of years and now are pretty relentlessly executing season after season," Peck said in conference call yesterday. He reassured analysts that Gap was trying to build out its new fast fashion-esque supply chain as quickly as it can. Using Old Navy as a template, the plan is to use this new model for the spring 2016 season. Peck's mentioned this plan before: he first talked about copying the Old Navy success story for Gap this past May. According to WSJ, Gap will record $130 million to $140 million in restructuring charges for 2015, including the closure of underperforming stores.
As for the "new" Banana Republic under Marissa Webb, Peck said on the call, "I’m really confident with the design point of view that we have in the business. I feel like the team underneath Marissa is really centered on the aesthetic of the brand, really in the sweet spot of what Banana is and should be. And I’m confident that we have a significant opportunity as we get into the latter half of this year and next year to really drive the business to merchandising as well."