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Gap sold a lot of similar styles to Old Navy for a much higher price.
Business Insider/Jessica Tyler
  • Gap is struggling to keep up with its sister stores Old Navy, Banana Republic, and Athleta.
  • Gap Inc,. saw 2% sales growth overall, but the Gap brand reported comparable sales were down 5% this quarter.
  • We visited a Gap store to see why it’s struggling.

Gap is struggling to keep up with its sister stores.

Gap Inc., the parent company of Gap, Banana Republic, Old Navy, and Athleta, saw 2% sales growth overall, with growth spearheaded by Old Navy and Athleta. It was the seventh consecutive quarter of positive comparable sales growth for the company.

But the Gap brand itself is struggling — comparable sales were down 5% this quarter. “A rising economic tide does float all retail boats, but it cannot float those with holes in them and, in our view, Gap is still a very leaky vessel,” Neil Saunders, Managing Director of GlobalData Retail, told Retail Dive in an email.

Gap makes the mistake of discounting nearly everything in the store, threatening margins and making shoppers less likely to pay full price. It also offers a lot of the same styles and quality clothing as it’s sister store Old Navy, but the prices are much higher at Gap.

But Gap CEO Art Peck said in an earnings call last Thursday, “Quarter-by-quarter, we expect performance to improve, and we believe the worst is behind us.”

This is what we found when we visited a Gap in NYC.

1/16

We went to the Gap in the financial district. There was a 40% off sign in the window, and a 70% off sign outside the door.

We went to the Gap in the financial district. There was a 40% off sign in the window, and a 70% off sign outside the door. Business Insider/Jessica Tyler

2/16

Women’s clothing was on the first floor.

Women's clothing was on the first floor. Business Insider/Jessica Tyler

3/16

Generally speaking, it was pretty expensive.

Generally speaking, it was pretty expensive. Business Insider/Jessica Tyler

4/16

Even t-shirts were a bit expensive. A plain gray t-shirt cost $35.

Even t-shirts were a bit expensive. A plain gray t-shirt cost $35. Business Insider/Jessica Tyler

5/16

Considering the price tag, the styles weren’t that great. Many shirts on display were stretched out and wrinkled.

Considering the price tag, the styles weren't that great. Many shirts on display were stretched out and wrinkled.