The Gap Inc.
The Gap Inc. Michael Yang. Lemons LLP. Executive Summary. BUY. Strong multi brand platform Valuation Continued global expansion. Lemons LLP. Overview. Global clothing and accessories retailer founded in 1969 in San Francisco. Largest speciality retailer in US
The Gap Inc.
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Presentation Transcript
The Gap Inc. Michael Yang Lemons LLP
Executive Summary BUY • Strong multi brand platform • Valuation • Continued global expansion Lemons LLP
Overview • Global clothing and accessories retailer founded in 1969 in San Francisco. • Largest speciality retailer in US • 135,000 employees and 3,076 stores worldwide Lemons LLP
Industry Outlook • Consumer empowerment is quickly decreasing brand loyalty • Fast fashion continues to be the dominant strategy • Consumers spend through multiple channels • Increased discounting to drive sales Lemons LLP
Competitive Advantage “Wear our passion” Innovative designs Margin maximization Focused branding Socially responsible Global Expansion Lemons LLP
Key Facts Customers: Gap brands appeal to the entire market while focusing on trendy twists of classic designs for all ages while focusing on 18 to 35 Products: Gap leverages multiple price points to maximize price potential of products to avoid sale merchandise Competitors: Gap’s fresh designs avoid isolating any consumer or focusing on single markets • Catalysts: • Old Navy in China • Foothold in Brazil • Development of Intermix and Athleta Lemons LLP
StockPerformance S&P500 Lemons LLP
DCF Valuation Discounted Cash Flow Value of $49.47 Lemons LLP
InvestmentRisk • Falling out of favour • Failure to expand into global markets • Increased operating costs • Shrinking margins • Failure to adapt to trends Lemons LLP
Recommendation Product Offerings • Target Price $50 Global Expansion Valuation 22.6% Growth in 12 months Lemons LLP
