The Gap Cancels Orders, Setting Itself Up To Fail If Coronavirus Crisis Ends Sooner Than It Expects
Management at The Gap has just canceled summer and fall orders, according to a report from the Sourcing Journal. The company has asked suppliers not to ship completed summer products except for products designated for its e-commerce business and to hold off on production for fall. Fabric suppliers were also reportedly asked to stop production and keep all goods in their facilities. Those actions reflect a very pessimistic outlook. From my perspective, Gap’s management decision is wrong since it hurts their supply lines and will have an irreparable effect on relationships with their suppliers into the future. While the COVID-19 pandemic has led to store closures, social distancing and a virtual lockdown of the whole country, Governor Cuomo’s most recent assessment of New York’s situation suggests a more positive future. He sees a gradual reopening of business, with qualified, healthy people permitted to begin trade again. Read more at Forbes.
This pessimistic and short sighted reaction is not unique to the Gap…you can add Macys, Bealls and others to the list.