Gap to shut Old Navy stores in Japan
Gap is closing all 53 of its Old Navy shops in Japan by the end of January 2017. Just four years after entering the country, the chain has found itself in trouble, unable to attract shoppers with its low-end offerings. The blame goes to Gap, whose sole strategy for the chain seemed to hinge on low prices
In a country where more than a decade of deflation has made many people take low prices for granted, Gap and other apparel companies need to come up with fresh ways to get shoppers to open their wallets.
Gap is the world’s third-largest apparel company. It had been expanding in Japan until recently. Its namesake brand hit the market in 1995, followed by its high-end Banana Republic label in 2005. Old Navy came in 2012, with Gap betting that the Japanese demand for low-price clothing would increase.
At first, customers responded well to Old Navy’s combination of the American casual aesthetic and attractive prices. But people gradually grew bored with the brand’s offerings. Despite that, Gap did not reassess its approach, and continued to simply import the same clothes that it sold in the US.
One problem is that Old Navy sizing is tailored to foreigners, and clothes from local brands fit Japanese people better.