When Arthur Peck became CEO at Gap two years ago, he knew the company’s performance wasn’t where it needed to be.

“We knew that we were in an industry that was changing dramatically,” he said during the company’s recent fourth-quarter earnings call. “And looking back on it now, I think we probably all underestimated the magnitude and speed of the changes taking place. It’s been pretty stark what’s been happening over the last year. I’m pleased with the progress that we’ve made, but we are in a market that is in significant disruption.”

Given that the apparel market is growing, Peck said, “we’re in a market that has long-term structural growth, has continued to grow, and that is a good thing. We believe, fundamentally, there is a significant market share opportunity. To read the headlines today, you’ll see the words dead, dying, sick. We are none of those. We are healthy and strong and have a plan and clear direction. But we can all pick our favorite company that’s no longer in business and when the lights go off and the windows get boarded over, that is the market share that is made available to the rest of the industry. She’s not stopping shopping. She’s shopping someplace else.”

But if you don’t get the basics right, anything else you try to achieve will be diminished, Peck noted.

“We are a product company and we are a retailer,” he explained. “And if we don’t get our product right, we will not win, regardless of how good we are in digital or many other things. It starts with an emotional product that she connects to that has the right quality, the right fit, and the right value proposition.”

Peck said the market is continuing to move toward rewarding size and scale, “whether that’s vendor relationships that provide favorable pricing and innovation, whether it’s us with a multi-brand portfolio doing business with our landlords to optimize our real estate footprint, or frankly whether it’s our balance sheet and income statement where we see scale in investments, whether it’s technology, innovation, or other forms. But this is a market that is moving toward rewarding size and scale, and we believe that conveys us a significant structural advantage.”

Omni, almost a cliché term at this point, Peck said, pertains to Gap customers.

“Our customers are omni today and that is a fundamental reality,” he said. “Many of our customers begin their journeys with our brands on their phones and they finish it in our stores. Many of our customers begin their journeys with our brands in our stores and they finish it on their phones. And we’ve been doing work and we will continue to do work to really line up with where our customers are, not where they’re going, but where they are today. A time of disruption means that market share becomes more fluid. And if we put what we believe are our structural advantages together, along with much of the work that we’ve been doing on product and experience, we believe we have a significant opportunity to consolidate and gain market share going forward.”

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