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Gap Would Consider Using Amazon to Help Fix Its Sales Problem

May 18, 2016, 3:11 PM UTC
Key Speakers At The Clinton Global Initiative (CGI)
Photographer: Michael Nagle/Bloomberg via Getty Images
Photograph by Michael Nagle—Bloomberg via Getty Images

Gap Inc. (GPS) is looking at every option available to help it shake off its long sales funk.

For the retailer, whose three main brands—Gap, Banana Republic, and Old Navy—have struggled mightily for months, that includes considering third-party marketplaces, such as (AMZN).

“To not be considering Amazon and others would be, in my view, delusional around the customer’s behavior,” CEO Art Peck said Tuesday at the company’s annual investor meeting in San Francisco. “We are always considering all of the opportunities beyond our traditional mix of channels and stores. And Amazon is certainly one, and there are others out there as well.”

It’s easy to see the allure of Amazon: Cowen & Co has forecast the online marketplace will surpass Macy’s (M) as the top U.S. seller of apparel next year. Gap is one of the largest retailers online, selling $2.5 billion worth of clothes in the last year, for 16% percent of sales, according to eMarketer.

But its prolonged slump is forcing the largest specialty apparel U.S. retailer to consider all sorts of moves to reignite growth. The company is already working to change its production to be quicker and nimbler so it can jump on fashion changes.

Declining mall traffic, market losses to fast-fashion chains like H&M and Uniqlo, and stellar results from discounter TJX’s T.J. Maxx (TJX) have all hurt Gap. Comparable sales in April fell for their 13th straight month, and shares are down more than 55% from a 52-week high.

To be fair, Gap is not alone in its sales woes. Everyone from Target (TGT) and Kohl’s (KSS) to J.C. Penney (JCP) and Nordstrom (JWN) have hit a rough patch this spring.