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Supply chain woes could cost Gap 650 million dollars

By Don-Alvin Adegeest



Image: Gap AW21 campaign

The product delays affecting Gap are the latest example of supply chain woes facing the fashion industry.

After adjustments, Gap expects the loss of inventory to be between 550 million to 650 million dollars in lost sales. On top of that the American retail giant is spending 450 million dollars in air freight to expedite shipping and avoid further delays.

“While we entered the third quarter with growing momentum, acute supply chain headwinds affected our ability to fully meet strong customer demand. Still, we made an intentional investment in building enduring customer loyalty with accelerated use of air freight to serve them this holiday, choosing long- term growth opportunity over near-term impact to profitability,” said Sonia Syngal, CEO, Gap Inc.

“Current pressures have not distracted us from what matters: growing our billion-dollar brands, delighting our over 64 million customers with product and experiences that drive lifetime value and restructuring and digitizing our business with an eye on creating a better future, faster.”

Supply Chain