Gap (NYSE:GPS) announced that it plans to test small batches of product in its brand name stores this spring and then quickly buy more if the goods are selling well. After reporting declines in profits and sales for the quarter, the apparel retailer is finally dipping its toes in the fast-fashion world.
The fast-fashion model allows retailers to jump into trends and adapt to shopper behavior quickly. Rumors that Gap was going to try out this method of selling began back in May as the retailer struggles to keep up with popular chains such as H&M, Zara and Forever21. The test at the brand's Old Navy unit has thus far helped post sales gains, reported MarketWatch. The current model at the Gap is similar to other apparel retailers, where it can take a year for products to arrive in stores and make it difficult to reorder or scale back.
As part of its turnaround, Gap recently closed 175 stores and let go of 250 employees at its headquarters.
Sales fell 2 percent in the second quarter, and same-store sales fell 6 percent at Gap and 4 percent at Banana Republic. The one bright spot was the 3 percent rise in sales at Old Navy.
-See this MarketWatch article
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