Old Navy has clothing sizes for everyone. It turned against him.
Some consumers say they bought clothes from other chains, after being unable to find their sizes at Old Navy. Getty Images/AFP
Old Navy decided to make clothing shopping more inclusive for women of all body types. It ended up with too many extra-small and extra-large items and too few of the rest, a mismatch that frustrated customers and contributed to plummeting sales and a reshuffle in management.
Tripping at Old Navy is a problem for its parent company, Gap Inc.
The chain accounts for the majority of the company’s sales and profits and helps support the weaker brands Gap and Banana Republic. It also shows the challenges of producing a wide range of sizes which has led to some brands no longer offering large sizes.
A Gap Inc. spokeswoman declined to comment.
The company will release its latest quarterly results on May 26. Analysts expect the company to report net revenue of $3.44 billion, down from $3.99 billion reported in the same period last year.
Considered one of the biggest launches in the brand’s history, Old Navy in August began offering all styles of women’s clothing in sizes 0-30 and XS-4X, making it the one of the first retailers to bet so much on inclusive sizes.
He did away with separate departments for small and large sizes and consolidated all sizes of each style. Mannequins of varying body shapes showcased the new merchandise. All sizes of a style were priced the same, a break from an industry practice in which retailers charge more for larger sizes.
“This is the biggest integrated launch in the brand’s history and an important growth engine for the business for years to come,” Gap chief executive Sonia Syngal told analysts. august.
Soon after, however, Old Navy’s sales began to plummet. Last month, Nancy Green, the chain’s president and chief executive, stepped down after less than two years at the helm of the brand.
Gap warned that sales for the spring quarter will fall short of expectations, in part due to problems at Old Navy.
Extended sizes were the culprit, according to current and former employees.
Stores were selling medium sizes and were jammed with heaps of extra small and extra large sizes, employees said.
To eliminate surpluses, Old Navy has put on sale a large quantity of women’s clothing this spring. The move contrasts with other retailers who have held the line on discounts due to high demand and supply chain challenges that have kept some items in short supply.
At an Old Navy store in Queens, New York, shelves of women’s clothing were recently selling for 50% off. Some women’s dresses were only available in XS and XXL. High-waisted canvas pants were sold out in sizes 4-10, but available in size 2 and 12-28.
Buyers said Old Navy’s message of inclusivity resonated with them. But it is sometimes compensated by the frustration of not being able to find its size.
“I’m not necessarily the thinnest,” said Sydney Bassard, of Charlotte, NC “Sometimes it’s hard to find clothes that aren’t tight.”
Still, the 26-year-old speech therapist said since Old Navy introduced the wider product line, she’s struggled to find her size, which is one of those missing since the expansion.
“I have to go through many sizes and then my size is not available,” she said.
Retailers from Victoria’s Secret & Co. to Target Corp. embraced size inclusion by adding more styles in both small and plus sizes to win new customers and promote more positive body imagery.
Few chains have gone as far as Old Navy.
“It was a big step for the industry,” said Liza Amlani, founder of consultancy Retail Strategy Group. “Old Navy has really invested in size equality, not just in the product, but also in the store layout.”
Most retailers sell clothes in sizes ranging from 0 to 14. Adding extra sizes incurs additional costs, from developing new designs to purchasing additional material, Ms Amlani said.
Retailers tend to buy more of a given item in medium sizes and less in extra small or extra large sizes. But they often still lack the most popular sizes, while ending up with too many less-requested sizes. Offering a wider range of sizes can amplify this problem, she said.
The average American woman is a size 18 today, up from a size 14 five years ago, according to Don Howard, executive director of Alvanon, which works with brands and retailers on sizing and fit.
The average weight of women aged 20 and older was 170.8 pounds in 2016, according to the most recent data from the National Center for Health Statistics. That’s up from 163.6 pounds in 2000.
Old Navy relied on NCHS data when developing its new size and conducting its own research. He surveyed hundreds of women about their body image, scanned the bodies of 389 women to create digital avatars, and built new fit blocks for sizes 20-28.
Since proportions change as sizes go up, it was necessary to review pocket placements, belt pitches and dress lengths to ensure the garments fit all sizes.
The launch was complicated by the Covid-19 pandemic, which forced some factories to close and created shipping delays that made it harder to get products to stores in a timely manner, some of the former employees said. .
Old Navy’s same-store sales fell 9% in the third quarter of last year and 6% in the fourth quarter, compared to the same periods in 2020.
The declines followed strong gains at the start of 2021 and through most of 2020. Compared to 2019, Old Navy sales were flat in the fourth quarter of 2021. Figures exclude newly opened or closed stores.
Paul Lejuez, a Citi analyst, said the expanded sizes weren’t attracting enough new customers or enticing existing customers to buy more.
“If some of these sizes aren’t selling, it doesn’t make sense to use floor space,” he said.
Fashion designer Diane von Furstenberg said last Wednesday that her namesake company wants to meet the needs of as many people as possible, but producing a wide range of sizes is expensive.
“If you’re doing a size 2 and if you’re doing a size 16, you’re not using the same amount of fabric,” she told The Wall Street JournalFestival of the Future of Everything. “You also don’t want to penalize the little people [who would be] pay more because the price must be the same. It can be very controversial to talk about it. But I think it’s important.”
Nicole Cueto said she’s been shopping for activewear and jeans elsewhere because it’s been difficult to find her size at Old Navy for the past few months.
“They mostly have larger sizes and sell smaller sizes,” said the 39-year-old publicist, who lives in Manhattan. “It’s super frustrating.”
Ms Syngal told analysts in November that Old Navy had more than doubled the number of extended-size customers in its database since launch and that 15% of customers who have purchased extended-sizes are new to the brand.
She said Old Navy, which manufactures many of its products in Vietnam, where factories have been closed for a long time due to the pandemic, was hit by inventory shortages that persisted into the fourth quarter.
In March, Ms Syngal said the brand was suffering from not having enough fashionable dresses and tops as consumers bought more of these items.
Old Navy’s stumbles don’t bode well for Gap Inc. In 2021, Old Navy accounted for 54% of the company’s sales and about 80% of profits, according to Mr. Lejuez.
In 2019, Gap announced its intention to separate Old Navy from the rest of the company. He dropped the idea a year later, saying it would have been too expensive and complicated.
Ms Syngal, the former executive of Old Navy, became CEO of Gap Inc. in early 2020.
Gap spent about $300 million in separation costs before deciding a spin-off wouldn’t be possible, according to company filings.
The company’s systems are too intertwined, according to a person familiar with the situation. For example, all brands use the same mainframe-computer inventory system, rather than a more modern modular system that would allow for easier changes.
Separating Old Navy would have been like cutting a bicycle in half, this person said.
“Because of the time spent analyzing the breakdown, Gap lagged behind other initiatives that have become critical to retail, such as product recommendations and personalization. Then the focus shifted towards inclusivity, which has further hindered the company from implementing new technologies.”