Gap Partners With Amazon on Distribution Deal
Gap Inc., in a potential boon to its distribution, is partnering up with Amazon Fashion in the U.S. and Canada to offer thousands of Gap brand products.
The partnership, unveiled Thursday, includes what Gap described as “basic, modern essentials for the family,” including hoodies, T-shirts, denim, socks, underwear and sleepwear for adults, teens, kids and babies.
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The launch also includes babyGap-branded nursery furniture and baby gear like strollers, bassinets, cribs and other items.
The products are already available on Amazon.com.
The development apparently went over well with Wall Street, which on Thursday afternoon pushed Gap Inc. stock up 6.8 percent, or $0.72, to $11.35, although the market had a huge rally following the Consumer Price Index report on slowing inflation.
“Collaborating with Amazon Fashion provides us a new channel to deliver Gap’s modern American essentials to even more customers in the U.S. and Canada,” said Mark Breitbard, president and chief executive officer of the Gap brand. “We are excited to take this step with Amazon Fashion, to expand our product offering and to deepen our connection with consumers through the Gap brand store.”
“At Amazon Fashion, we continuously expand our product offerings for our customers,” said Muge Erdirik Dogan, president of Amazon Fashion. “We’re excited to make shopping for Gap products even more convenient for customers with fast, free Prime delivery.”
“This is the first time that Gap is selling its products in Amazon stores,” a Gap spokeswoman told WWD. “The product sold in Amazon stores is an assortment of the same product that is offered in Gap stores and online, so this product is not exclusive to Amazon.”
Products have become available for purchase at Amazon.com/Gap or by searching “Gap” on mobile devices or desktop computers. The collection will feature thousands of items for the family, all available for purchase with Amazon’s customer service including fast, free Prime delivery.
Delta Children, a family-owned company that designs children’s furniture, has created babyGap-branded nursery furniture and a baby gear collection in a deal facilitated by Gap’s licensing agency, IMG. The new line, available on gap.com, Deltachildren.com and Amazon.com, includes cribs and crib mattresses with accompanying crib bedding, as well as recliners, strollers, bassinets and swaddles, with additional categories expected soon.
The Amazon news is a positive for Gap Inc., following a string of setbacks, including the premature cessation of the collaboration with Kanye West, who now goes by Ye, after disagreements between the two parties on how the agreement was being executed as well as Ye’s antisemitic comments. In September, the company told its employees it would wind down the partnership, and subsequently pulled all of the Yeezy Gap products from the shelves.
The company is continuing to search for a CEO since the sudden departure of Sonia Syngal in July. She has been succeeded on an interim basis by Bob Martin, executive chairman of the board.
The $16.7 billion Gap Inc. has had a sustained inability to pull itself out of the doldrums. Its three biggest brands — Old Navy, Gap and Banana Republic — have all been faltering for some time, though Old Navy only in the last few seasons after a series of missteps over sizing and fashion miscues.
Banana Republic, though still experiencing declining sales as of late, since the fall has exhibited more stylish and appealing collections harking back to the brand’s safari-style roots.
There have been concerns over Gap Inc.’s inventory levels and costs, though the firm’s pack-and-hold strategy and lower inventory purchases this year as well as some lower costs because of the discontinuation of air transport of merchandise should help Gap’s financial results going forward.
The combination of macroeconomic issues and persistent internal issues dragged Gap into the red during the second quarter ended July 30, when the group lost $49 million, compared to a profit of $258 million in the year-ago quarter. Net sales of $3.86 billion were down 8 percent compared to last year’s $4.2 billion. Comparable sales were down 10 percent year-over-year.
