Blog: Leonie BarrieGap CEO switch a sign of transition

Leonie Barrie | 13 October 2014

If evidence is needed as to the new direction likely to be pursued by US retail giant Gap Inc, look no further than the company's new leadership change. It was revealed last week that CEO Glenn Murphy is to step down in February, making way for Art Peck, the head of Gap's digital division.

The move is widely seen as marking the company's transition to a more digital focused business model, and potentially places a greater emphasis on non-flagship brands, which have been driving recent growth.

Gap, the US's largest specialty clothing retailer also revealed that September was "more challenging than expected", as same store sales stayed flat and it missed expectations for a second month. Indeed for many US apparel retailers, sales tailed off in September as back-to-school shopping wound down.

Shares in US department store group Sears Holdings tumbled after reports suggested that at least one vendor had halted shipments to the retailer on the recommendation of its credit department. Credit insurance providers were also said to have been sending out cancellation notices to vendors - claims Sears called "misleading."

As its name suggests, the lifeblood of the fast fashion industry is, largely, speed to market. In this month's management briefing, just-style looks at changing global sourcing trends, the role of air freight in fast fashion, how supply chains based on speed can avoid errors, and the way technology is helping companies share information more efficiently.

Spurred on by the back-to-school season and fears of potential disruption due to the ongoing dockworkers contract dispute, US apparel imports in August reached their highest level in more than a year. But while the top two suppliers China and Vietnam were the biggest beneficiaries, shipments from Bangladesh continued to fall.

A decade-long enthusiasm for cutting trade barriers might have come to an end, but Mike Flanagan points out that trade lobbyists are continuing to chase new barrier cuts, or defend concessions that have already reached the end of the road.

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