Gap confirms Banana Republic's exit from the UK

London - Banana Republic’s stay in the UK has come to an end, as parent company Gap Inc has confirmed that it will shut all of its eight Banana Republic stores in the country.

The confirmation comes a mere hours after Retail Week released a report claiming that the US fashion retailer was preparing to shutter its Banana Republic stores in the UK. “After a thorough evaluation process, the company has decided to close eight Banana Republic stores in the United Kingdom,” said a company spokeswoman.

Gap Inc to shutter eight Banana Republic stores in the UK

Gap Inc aims to close the majority of its Banana Republic stores in the UK by the end of its 2016 fiscal year. However Banana Republic will maintain a presence in the country through its online store, www.bananarepulic.co.uk, added the spokeswoman. The US-based retail company did not comment on who will take over its stores in the UK, but its store leases in key locations such as Regent Street and Covent Garden are likely be taken over by competitive mass market retailers such as H&M and Zara.

The company’s decision to pull Banana Republic from the UK retail market after first entering it right years ago is part of Gap Inc wider, long-term strategy, first announced in May, to boost its overall business performance following more than a year of disappointing sales. At the time, the company stated it aimed to shut 75 non-performing Old Navy and Banana Republic stores around the world, including 53 Old Navy stores in Japan as it returned its main focus to its core market of North America.

The announcement comes as Gap Inc starts to shift Banana Republic focus in the US to factory outlets. According to numerous media reports, Banana Republic is currently in the process of converting a number of its main, full-line stores in New York City to factory outlet stores, in particular stores located in urban shopping areas. “We always evaluate our store fleet to ensure we have the right stores in the right locations to best serve our customers’ needs,” said the company in a statement on its Banana Republic store transformations.

The store changes further signify Gap Inc’s struggle to align Banana Republic brand image and offering. In the past the fashion label marketed itself as the go to store for “contemporary classics.” However, over the years the brands offerings and collections have been inconsistent, as Banana Republic tried and failed to compete with fast-fashion, trend driven competitors before returning to its classical offering earlier this year.

“We took Banana to a place where we were trying to lead on fashion and trend, and she does not want Banana to be that,” said Art Peck, Chief Executive of Gap Inc earlier this year. “Executives are working on a return to the classics, but sagging sales show that it hasn’t resonated yet with customers.” In September Banana Republic announced Olivia Palermo as its first-ever women’s wear global style ambassador as means to help overcome confused concerning its brand image and tackle some of the issues it struggled with over the years, including too wide of a product offering and misfitting garments.

"Product must always be the core focus, but Banana Republic has underinvested and not listened to customer feedback," commented Honor Strachan, lead analyst at Verdict Retail in a statement. "At the right price, its contemporary, classic styling should work in the UK – more trend-led and formal than Gap, but less European than Zara or Massimo Dutti, and better quality workwear than the midmarket. But the fit of product is all wrong. This immediately became apparent on entering the UK, with size 8 tailored work dresses fitting a size 12, and dresses in its petites range with sleeves a 10-year old would struggle to fit their arms through."

"This obvious miscalculation on fit is disastrous for a retailer with such scale, but even more tragic is that the retailer failed to make significant improvements over the last eight years to win back dissatisfied shoppers. Had the design and fit-process received more investment, skill and attention, its premium positioning would have been easier to justify."

Banana Republic currently counts over 650 stores throughout Europe, Japan and North America, in addition to over 100 franchised-run stores in over 20 countries.

Photos: Banana Republic AW16, Facebook