Gap is struggling to keep up with its sister brands - we visited the store and saw why

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Gap is struggling to keep up with its sister brands - we visited the store and saw why

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Business Insider/Jessica Tyler

Gap sold a lot of similar styles to Old Navy for a much higher price.

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  • 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.

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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.

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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.

Women's clothing was on the first floor.

Women's clothing was on the first floor.
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Generally speaking, it was pretty expensive.

Generally speaking, it was pretty expensive.

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.
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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.

It was confusing who the store was trying to appeal to. A lot of what it carried looked like what you might fight at Gap's sister store Old Navy, but with a higher price tag.

It was confusing who the store was trying to appeal to. A lot of what it carried looked like what you might fight at Gap's sister store Old Navy, but with a higher price tag.
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Even small products were a bit expensive, like this $35 belt.

Even small products were a bit expensive, like this $35 belt.

Gap sold its logo hoodies for $40, but they were 40% off, as was most of the store.

Gap sold its logo hoodies for $40, but they were 40% off, as was most of the store.
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Gap also sold sleepwear...

Gap also sold sleepwear...

...and workout gear.

...and workout gear.
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But some of what was sold as workout gear didn't really seem suited for that.

But some of what was sold as workout gear didn't really seem suited for that.

There was a huge sale section with everything from swimsuits, to t-shirts, and denim for under $15. That's nearly 75% off the regular price of denim.

There was a huge sale section with everything from swimsuits, to t-shirts, and denim for under $15. That's nearly 75% off the regular price of denim.
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Upstairs was a kids section, and the prices were about the same as the women's clothes.

Upstairs was a kids section, and the prices were about the same as the women's clothes.

The men's section was downstairs, and it was more expensive than the rest of the store. Jeans cost almost $80, and a flannel shirt cost $60.

The men's section was downstairs, and it was more expensive than the rest of the store. Jeans cost almost $80, and a flannel shirt cost $60.
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Some products on display were already stained.

Some products on display were already stained.

Even though the quality of the clothes at Gap was high, it essentially sold all of the same products as its sister store Old Navy, but at a much higher price. It's clear why the store is struggling to keep up.

Even though the quality of the clothes at Gap was high, it essentially sold all of the same products as its sister store Old Navy, but at a much higher price. It's clear why the store is struggling to keep up.
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