Management at The Gap has just canceled summer and fall orders, according to a report from the Sourcing Journal. The company has asked suppliers not to ship completed summer products except for products designated for its e-commerce business and to hold off on production for fall. Fabric suppliers were also reportedly asked to stop production and keep all goods in their facilities. Those actions reflect a very pessimistic outlook.
From my perspective, Gap’s management decision is wrong since it hurts their supply lines and will have an irreparable effect on relationships with their suppliers into the future. While the COVID-19 pandemic has led to store closures, social distancing and a virtual lockdown of the whole country, Governor Cuomo’s most recent assessment of New York’s situation suggests a more positive future. He sees a gradual reopening of business, with qualified, healthy people permitted to begin trade again.
The Gap is looking at a much more negative scenario, with a glum outlook for fall. I hope they are wrong. And if they are, it will be tough to get the right merchandise into the stores to sell at the right time as suppliers cannot turn on a dime. Maybe the company is considering permanent closure of some of their units. Newly appointed CEO Sonia Syngal promised decisive action that will ensure they will emerge well positioned to compete in the years ahead. Yet I believe the disruptive action that was just taken is irreparable and undermines performance prospects into the future; the company will be ill prepared to service customers fully.
Read the full article here : https://www.forbes.com/sites/walterloeb/2020/04/08/a-tale-of-two-attitudes-the-gap-cancels-orders-while-omnicality-can-save-stores-in-the-coronavirus-environment/#5b258fc4a441