To: Brenda Curtis
Date: 2/4/12
Subject: Assessment of GAP

Starting as a retailer for Levi’s jeans in 1969, The Gap, Inc. operates as a specialty retailing company. The company offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brand names. Gap has grown to approximately 3,000 company-operated stores; and 200 franchise stores in 90 countries worldwide. Their brand name targets many end users; this reinforces their strategy to provide multiple brands through multiple channels in different geographies. They emphasize style, superior quality, and good value to consumers worldwide. Gap Inc. operates in a slow growing and highly competitive environment both internationally and domestically. The retail industry through the 90’s was unusual, mature, and fragmented. Companies that have cheap labor costs and low costs create a low barrier of entry in the retail industry. A company like Gap that already has a distribution channel and many retail locations has an advantage in an already saturated market. Correlation between the general slow economy and consumer confidence are directly related. Please see exhibit 1 which reflects a stagnant economy in 1990. Lacking consumer confidence there will be a negative effect on consumer spending on luxury items. With a lag in the domestic market Gap has focused its efforts internationally as a source of revenue. By the end of 1993, the Gap expects to have an approximately 100 stores outside the U.S, primarily in Canada, but with an increasing presence in the U.K. Longer term, there is some possibility of expansion to Europe and Asia. Gap’s acquisition of Piperlime allows it to create an online presence which fosters growth in different sectors and diversifies the different avenues of income. Piperlime is an