-By Ankita Dutta.
Gap, a struggling clothing store, is eliminating 1,800 positions in an effort to slash costs. In a regulatory filing released on Thursday (April 27), the firm disclosed the layoffs and stated that they were a part of a strategy to “simplify and optimise its operating model and structure,” which included “decreasing management layers to enhance quality.”
Interim Gap CEO Bob Martin expressed that the company was aiming to “flatten” its structure in order to enhance decision-making and cut costs.
In the future, Martin stated that they believe these efforts will unleash unrealized possibilities across our brands, enabling us to position ourselves as a more customer- focused, quick, and innovative organisation.
“These steps are expected to produce annualised savings of $300 million, as we mentioned in our most recent earnings press release,” emphasized Martin.
In that financial report, Gap recorded a net loss of $202 million for the year, a significant decrease from the net income of $256 million it declared in the previous fiscal year. Additionally, the company’s revenues for the year fell from $16.67 billion to $15.62 billion.
Additionally, the rapper Ye (previously known as Kanye West) terminated his contract with Gap in the quarter prior to that following alleged contract violations and a lack of creative control, resulting in $53 million in impairment charges for the company. In response to the rapper’s anti-Semitic comments, the business removed all Yeezy goods from its stores in late October.
As previously said, the company opted not to provide an outlook for the upcoming year, citing uncertain macroeconomic conditions as well as its attempts to make changes and find a new CEO. The company, whose subsidiaries include Old Navy and Banana Republic, has been searching for solutions to regain its momentum and re-engage customers in light of these difficulties. As a result, according to a report from PYMNTS this week, “Gap has turned to the nostalgia trend, forging a partnership with Mattel,” joining up with the toymaker for a clothing collaboration centred on brands like Barbie, whose likeness will launch the campaign.
According to the press release, the Gap x Barbie line “embodies the concepts of inclusiveness and uniqueness, which perfectly align with the beliefs of Gen Z.” It also happens to be the same time as the Margot Robbie and Ryan Gosling-starring movie “Barbie” is released.