Sailing In Rough Waters, Old Navy Charts a New Merchandising Course

Implications: In moving  from a key item merchandizing strategy to monthly "wardrobe building collections," will Old Navy  alienate of many of its core customers? Does Old Navy have the sourcing and logistics structure in place to execute a fast fashion delivery initiative without severe disruption of its supply chain? With no apparel retail experience in his resume, can Glenn Murphy, CEO of Gap Inc.,  properly evaluate the risks to customer loyalty,  inherent to radical merchandizing strategy shifts?

Analysis:

After sixteen months at the helm of a ship sailing in very stormy seas, Dawn Robertson is charting a new course for Old Navy, Gap Inc's. largest brand. With a new design and merchandizing team in place and designer Todd Oldham installed as creative director, Old Navy previewed some of its new collections today in New York.

Merchants, typically, have a much easier time building a merchandizing concept  from scratch than repositioning a brand with a large core customer base. For sure, Old Navy has poorly executed its low price-point key item strategy, but the $6.8 billion specialty chain runs the risk of shocking their core customers with fashion collections that center around jackets and related separates. Does Glen Murphy, the newly installed Gap Inc. CEO, fully understand the risks to customer loyalty that dramatic merchandise assortment shifts bring to the table?
 
Binging fashion apparel quickly, from concept to retail store has been proven successful by European fast fashion player like H&M, Zara and Topshop, but it took many years for these companies to refine their logistics  and locate factories that can move fast without compromising quality. Does  Mr. Murphy truly understand  the financial ramifications of a logistical breakdown at the height of a selling season in the world of fashion?

The first new monthly collection at Old Navy will be in store this March and I for one will be keeping a close eye on comparative store sales and hoping for the best.