Gap Was Compared to a 'Lazy Student' After Its $273 Million Loss — Now the Retailer's Trying to Do Better by Copying MetaThe retailer thinks the move will save it $300 million.
ByAmanda Breen•
Tech companies like元andTwitterhave made headlines for slashing their workforces, targeting management roles in particular, and companies in other industries are taking the hint.
Gapannouncedon Thursday that it's "decreasing management layers" to improvedecision-makingamid slumping sales,Insiderreported.
Gap estimates the cut will result in $300 million in annualized savings.
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The retailer, which owns Banana Republic,Old Navyand Athleta, has experienced declining popularity for years, and itreporteda net loss of $273 million for the last three months of 2022 after group sales fell 6%.
Additionally, as of August 2022, Gap had "bloated" merchandise levels with a 37% increase in inventory year over year,The Wall Street Journalreported. Although some items might be "timeless" basics that Gap brings back in the future, the retailer will also have to compete with other apparel sellers' excess inventory, which could hinder profitability.
"Gap is rather like a lazy student that has the capability but completely lacks the capacity or will to put in the work to deliver a better performance," Neil Saunders of GlobalData Retail told clients this week.
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Gapis still searching for its next CEO, and Athleta's CEO, who just announced her departure, will also have to be replaced.
Gap Inc. is down nearly 24% year over year.
