The Gap Inc. E-Portfolio

The Gap Inc.

“It makes me happy, to see the positive effects we’ve been able to achieve.” - Don Fisher

The first Gap store opened in San Francisco in 1969. The two owners found they were unable to find a pair of jeans that really fit and the idea of the Gap was born.[1]. Doris and Don Fisher unexpectedly transformed the retail industry with their humility, compassion and strong desire to win. Don Fisher, Gap founder was known to visit his stores often. Don passed away in 2009.[2]

The principles which are the foundation of Gap are simple: creativity, delivery results, doing what’s right and always putting the customer first.

Today Gap Inc. is an international retailer specialising in five brands – Gap, Banana Republic, Old Navy, Piperlime and Athleta. They currently operate in approximately 3,100 stores and employ more than 134,000 people.

In 2011 Gap Inc. expanded to China, Australia and Italy. They have also broadened their online shopping by offering shipping to approximately 90 countries worldwide.

The concept of the Gap was inspired by the idea of “The Generation Gap”. Don conducted market research and determined four important requirements for success: the right location, sufficient parking, adequate “in-stock” position, and the right employees. The Gap would initially be loaded with Levi’s pants as well as records and tapes and they would aim to appeal to the 12-to-25 year old customer.

                                         The Gap was the first to include a fully enclosed dressing room and wall displays to sell merchandise.

This year’s quarterly report shows that net sales for the second quarter of the 2012 fiscal year has increased by 6% to $3.6 billion dollars. The net sales for the second quarter in 2011 were $3.4 billion. The direct net sales for the second quarter of 2012 increased by 24% to $384 million from $309 million in the second quarter of 2011. Direct sales include sales for each of the online brands including Piperlime and Athleta. Net sales outside of the U.S. and Canada increased 7% to $551 million.

Gross profit for the second quarter of the same fiscal year (2012) was $1.4 billion up from $1.3 billion in 2011. The gross margin for the second quarter of 2012 was 39.9 percent. This change is illustrated in the graph below.

Operating expenses for the second quarter of 2012 fiscal year were $1 billion. These expenses include fixed costs such as warehouse buildings, manufacturing facilities, rent, insurance, machinery and variable costs such as fixtures, store displays, wages, utilities, sales tags, and other retail supplies.[3]

Plans for the future include opening additional stores and outlets in Asia, Canada and Europe.

For an inside look at how and where their denim jeans are designed and created please take a minute to view this video from their Youtube channel.

I’ve created a table to show all five brands at the Gap Inc. All information provided in this chart is of my own interpretation of the websites given for each company and are my own estimations.

1972 marked the Fishers launching their very own Gap label which made history in its own as they became the first retail store to use their store name as their brand name. They became the first Private-Label retail store. The company went public in 1973.

The Gap Foundation was formed in 1977 by the Fishers which helps people in underserved communities around the world. This foundation would aid people to change their lives and take personal ownership in their future. Since its introduction, Gap Foundation has given over $100 million to various non-profit organizations and causes. Don was actively involved in volunteering, mentoring, sharing his expertise and making financial contributions. He wanted to make a long lasting impression on youth, education and the arts.

In 1983 Don hired Mickey Drexler, a skilled merchant who aided in the acceleration of the Gap business and launched the company into becoming and major label. They would later acquire Banana Republic who was then a two store mail-order catalogue business. A few years later they would create Old Navy from scratch which became the first retailer in history to reach $1 billion in sales in only four years.

1986 marks when Gap expanded into Gap Kids offering the Gap brand in children sizes. 1987 Gap opens their first store in London, expanding beyond North America for the first time.

Don Fishers was a strong supporter of the Boys & Girls Club of America and served as a governor. He believed that all youth deserved an education. In 2000 Don also gave $15 million to create the KIPP Foundation. The Knowledge is Power Program was launched to train school leaders to open schools across the United States.