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Tuesday, June 16, 2015

Gap, raises wages and then closes stores

Last year, the Gap delighted the Democratic Party by announcing it was raising its

Wonder how they feel today with the announcement that the Gap will close 25% of its stores?

From the New York Times on February 19, 2014:
In a surprising move, Gap Inc. informed its employees on Wednesday that it would set $9 as the minimum hourly rate for its United States work force this year and then establish a minimum of $10 next year.
Gap said this move would ultimately raise pay for 65,000 of its 90,000 American employees, including those at Banana Republic, Old Navy and other stores.
Gap is making this move as many states consider raising their minimum wage, and as Republicans and Democrats debate a bill that includes a proposed increase in the federal minimum wage to $10.10 an hour by 2016.
President Obama has endorsed the increase, and has campaigned for it at stops around the country.
The George Soros-funded TPM reported: "The Gap Already Reaping Major Benefits From Minimum Wage Hike" and said, "The increased interest means the company has a better selection of potential employees."

From USA Today today:
Gap announced Monday it will close a quarter of its stores and cut 250 corporate jobs as it tries to chart the clothing brand back toward growth.
The company will close 175 stores across North America, not including outlets or factory stores, based on store performance. There will be additional store closures at European locations. About 140 stores will close this year. Gap will continue to operate about 500 Gap stores, plus 300 outlet stores.
Gap has been struggling to entice customers amid competition from fast fashion brands. Same-store sales fell 10% in the first quarter, compared with a 5% drop in the year-ago quarter.
"We're focused on offering consistent, on-brand product collections and enhancing the customer experience across all of our channels, including a smaller, more vibrant fleet of stores," said Jeff Kirwan, global president for Gap, in a statement.
Sales fell 10%.

Why?

Because of concentrating on its customers, Gap managers played politics.

3 comments:

  1. The gap in question is the gap in the intelligence of the management--too big to cross.

    ReplyDelete
  2. Interestingly Hobby Lobby pays there associates $10/hr, at least in Texas. They are not going broke. I guess their employees *are* worth $10/hr.

    But they are conservative, and therefore e-e-e-vil.

    ReplyDelete