Gap Inc. has acquired eCommerce startup Drapr as part of the company’s increasing focus on digital sales, an initiative that helped boost the San Francisco-based apparel retailer to its best second-quarter sales in over a decade.
Drapr allows customers to quickly create 3-D avatars and virtually try on clothing, allowing them to find the best clothing size and fit for their style and body type, helping to reduce unnecessary returns.
Sally Gilligan, chief growth transformation officer at Gap Inc., said that fit is the No. 1 point of friction for customers, but “Drapr has shown it can help shoppers efficiently find the size and fit they need.” The acquisition, she said, will improve the fit experience for customers and help accelerate the company’s ongoing digital transformation.
The move also complements Gap Inc.’s launch of an integrated shopping experience at Old Navy, wherein all of its women’s styles in sizes 0 to 30 and XS to 4X will be displayed together online and in-store with no price difference. Mannequins have also been resized into sizes 4, 12 and 18, as have the selection of models displaying Old Navy apparel.
See more: Old Navy To Revamp Plus-Size Line With Integrated Shopping Experience
Nancy Green, president and CEO of Old Navy, said the addition of Drapr’s technology will help the brand continue to build on its expertise “and deliver a more personalized and inclusive fit experience for all of our customers.”
“Most people either don’t know their exact measurements or are looking for a specific type of fit that numbers alone can’t tell them,” Drapr Co-founder and CEO David Pastewka said in a statement. “Drapr has proven effective, and we are excited about the impact we can have on customers at scale as part of the Gap Inc. family.”
Realigning the Store Portfolio
Gap Inc. said it had $4.2 billion in net sales between April and July, up 29 percent versus 2020 and up 5 percent compared to two years ago. Comparable sales increased by 3 percent year over year and 12 percent versus 2019. Gap Inc’s online business grew by 65 percent in the second quarter compared to 2019, and contributed 33 percent of total sales in the quarter.
Broken out by brand, Old Navy saw a 21 percent increase in net sales and Athleta saw a 35 percent increase compared to 2019; Gap’s net sales declined by 10 percent and Banana Republic’s net sales declined by 15 percent, in part because of permanent store closures at both brands.
Last year, Gap Inc. said it would be closing 350 Gap and Banana Republic stores across North America, 75 percent of which will be completed by the end of this year. Year to date, 24 stores have been closed, with 51 more expected in the coming months. Last year, the retailer closed 189 stores.
Chief Financial Officer Katrina O’Connell said the company is also in discussions to move to a partnership model in France and Italy, and it plans to close all store locations in the U.K. and Ireland by the end of the year, though it will retain an online presence in those markets. In 2019, the CFO noted, the European market generated $539 million in net sales, about half of which came from the U.K. and Ireland at a slight operating loss.
Old Navy and Athleta, on the other hand, have opened 25 and 13 stores, respectively, so far this year; Old Navy will likely end the year with 30 to 40 new stores by year-end, and Athleta will likely end with 20 to 30 new stores.
O’Connell told investors and analysts on a conference call that the company is pleased with the customer response to Gap Home, a collaboration with Walmart, as well as its 10-year partnership with Kanye West’s Yeezy brand. The Gap-Yeezy deal caused the $200 sky-blue “Round Jacket” to sell out in less than an hour in June, and the CFO said that 75 percent of customers who ordered the jacket were new to the Gap brand.
Read more: Gap-Yeezy Deal Reaps Instant Traffic Surge For 50-Year-Old Retailer
“We’re pleased with the customer response; it validated this partnership,” O’Connell said. “We’re pleased with the product pipeline that we have coming.” She added, though, that given the “coolness” of the partnership, future product drops will likely be revealed on social media rather than an earnings call.
“It’s following a creative process versus a more traditional process, and so that will lead to incremental excitement as this all builds,” she noted.
Looking ahead, executives said the company will likely look for more partnerships akin to the Gap Home line launched with Walmart earlier this year, looking specifically at categories like wellness and the “homebody economy.”
“We see a sizable future opportunity to compete in new categories,” O’Connell said.
Hole Inc. has acquired eCommerce startup Drapr as a part of the corporate’s growing deal with digital gross sales, an initiative that helped increase the San Francisco-based attire retailer to its greatest second-quarter gross sales in over a decade.
Drapr permits prospects to shortly create 3-D avatars and nearly attempt on clothes, permitting them to seek out the perfect clothes measurement and match for his or her fashion and physique sort, serving to to cut back pointless returns.
Sally Gilligan, chief progress transformation officer at Hole Inc., mentioned that match is the No. 1 level of friction for patrons, however “Drapr has proven it will probably assist consumers effectively discover the dimensions and match they want.” The acquisition, she mentioned, will enhance the match expertise for patrons and assist speed up the corporate’s ongoing digital transformation.
The transfer additionally enhances Hole Inc.’s launch of an built-in buying expertise at Outdated Navy, whereby all of its ladies’s kinds in sizes 0 to 30 and XS to 4X will probably be displayed collectively on-line and in-store with no value distinction. Mannequins have additionally been resized into sizes 4, 12 and 18, as have the choice of fashions displaying Outdated Navy attire.
See extra: Outdated Navy To Revamp Plus-Measurement Line With Built-in Purchasing Expertise
Nancy Inexperienced, president and CEO of Outdated Navy, mentioned the addition of Drapr’s expertise will assist the model proceed to construct on its experience “and ship a extra personalised and inclusive match expertise for all of our prospects.”
“Most individuals both don’t know their actual measurements or are in search of a particular sort of match that numbers alone can’t inform them,” Drapr Co-founder and CEO David Pastewka mentioned in a press release. “Drapr has confirmed efficient, and we’re excited concerning the influence we will have on prospects at scale as a part of the Hole Inc. household.”
Realigning the Retailer Portfolio
Hole Inc. mentioned it had $4.2 billion in internet gross sales between April and July, up 29 % versus 2020 and up 5 % in comparison with two years in the past. Comparable gross sales elevated by 3 % yr over yr and 12 % versus 2019. Hole Inc’s on-line enterprise grew by 65 % within the second quarter in comparison with 2019, and contributed 33 % of complete gross sales within the quarter.
Damaged out by model, Outdated Navy noticed a 21 % enhance in internet gross sales and Athleta noticed a 35 % enhance in comparison with 2019; Hole’s internet gross sales declined by 10 % and Banana Republic’s internet gross sales declined by 15 %, partially due to everlasting retailer closures at each manufacturers.
Final yr, Hole Inc. mentioned it might be closing 350 Hole and Banana Republic shops throughout North America, 75 % of which will probably be accomplished by the tip of this yr. 12 months so far, 24 shops have been closed, with 51 extra anticipated within the coming months. Final yr, the retailer closed 189 shops.
Chief Monetary Officer Katrina O’Connell mentioned the corporate can also be in discussions to maneuver to a partnership mannequin in France and Italy, and it plans to shut all retailer areas within the U.Ok. and Eire by the tip of the yr, although it’s going to retain an internet presence in these markets. In 2019, the CFO famous, the European market generated $539 million in internet gross sales, about half of which got here from the U.Ok. and Eire at a slight working loss.
Outdated Navy and Athleta, then again, have opened 25 and 13 shops, respectively, thus far this yr; Outdated Navy will probably finish the yr with 30 to 40 new shops by year-end, and Athleta will probably finish with 20 to 30 new shops.
O’Connell informed buyers and analysts on a convention name that the corporate is happy with the client response to Hole Dwelling, a collaboration with Walmart, in addition to its 10-year partnership with Kanye West’s Yeezy model. The Hole-Yeezy deal brought on the $200 sky-blue “Spherical Jacket” to promote out in lower than an hour in June, and the CFO mentioned that 75 % of shoppers who ordered the jacket have been new to the Hole model.
Learn extra: Hole-Yeezy Deal Reaps On the spot Visitors Surge For 50-12 months-Outdated Retailer
“We’re happy with the client response; it validated this partnership,” O’Connell mentioned. “We’re happy with the product pipeline that we’ve got coming.” She added, although, that given the “coolness” of the partnership, future product drops will probably be revealed on social media somewhat than an earnings name.
“It’s following a artistic course of versus a extra conventional course of, and so that may result in incremental pleasure as this all builds,” she famous.
Wanting forward, executives mentioned the corporate will probably search for extra partnerships akin to the Hole Dwelling line launched with Walmart earlier this yr, trying particularly at classes like wellness and the “homebody economic system.”
“We see a large future alternative to compete in new classes,” O’Connell mentioned.