*By Carlo Versano* The middle is falling out of retail. Stores that don't have a distinct identity in an era of direct-to-consumer marketing are getting crushed. For the latest example, look no further than Gap, which reported a 5 percent drop in sales at its namesake brand, even as its other outfits displayed strength. Old Navy sales were up 5 percent in the same period. It's another indication that Gap's status as an iconic, wholly American brand is not enough to compete in an apparel market dominated by high-end experiential stores (Nordstrom), value-oriented stalwarts (Target), and fast-fashion, inexpensive trendsetters (H&M). And, of course, Amazon looms over everything. "It's not quite clear what Gap's identity is," Quartz fashion reporter Marc Bain said. Bain wrote an article earlier this year, ["Gap Inc. Should Just Be Renamed Old Navy Inc."](https://qz.com/1220104/gap-inc-should-just-be-renamed-old-navy-inc/), and the latest earnings report may prove his point. But Gap's results don't detract from retail's financial health after a prolonged period of turmoil, Bain said Friday in an interview on Cheddar. For years, retailers had too many stores and built them too big. A contraction in brick-and-mortar locations is just now paying off. "Companies are shrinking to succeed," Bain said. Bain cited redesigns of Nike and Adidas flagships as examples. He added that Walmart's strategy of partnerships and acquisitions with e-commerce stars is another bright spot in the ever-changing retail landscape. And then there's Target. Fresh off a stellar quarter ー digital sales were up 40 percent and same-store sales up 4.5 percent. CEO Brian Cornell [said](https://www.cnbc.com/2018/08/22/target-ceo-credits-strong-growth-with-the-best-consumer-environment-hes-ever-seen.html) Wednesday that consumer environment of today is "perhaps the strongest I've seen in my career." President Trump mentioned those comments in a [tweet](https://twitter.com/realDonaldTrump/status/1032929824900370432) Friday morning, telling his followers that the economy is alive and well. For full interview [click here] (https://cheddar.com/videos/how-gap-compares-to-sister-brand-old-navy-after-earnings).

Share:
More In Business
Nestlé dismisses CEO after he has relationship with a subordinate
Nestlé has dismissed its CEO Laurent Freixe after an investigation into an undisclosed relationship with a direct subordinate. The company announced on Monday that the dismissal was effective immediately. An investigation found that Freixe violated Nestlé’s code of conduct. He had been CEO for a year. Philipp Navratil, a longtime Nestlé executive, will replace him. Chairman Paul Bulcke stated that the decision was necessary to uphold the company’s values and governance. Navratil began his career with Nestlé in 2001 and has held various roles, including CEO of Nestlé's Nespresso division since 2024.
Kraft Heinz undoes blockbuster merger after a decade of falling sales
Kraft Heinz is splitting into two companies a decade after they joined in a massive merger that created one of the biggest food companies on the planet. One of the companies will include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include brands like Oscar Mayer, Kraft Singles and Lunchables. When the company formed in 2015 it wanted to capitalize on its massive scale, but shifting tastes complicated those plans, with households seeking to introduce healthier options at the table. Kraft Heinz's net revenue has fallen every year since 2020.
Load More