Welcome back to The Spin! Today's top news is the break-up of Gap and Old Navy into two separate companies. We also check out Farfetch's new partnership in China, the growing marijuana industry's fascination with luxury fashion, and some new service ideas designed to lure customers into retail stores - and keep them there. Enjoy the read and feel free to share! Best, Ulrike


The Break-Up. Gap Inc is spinning its $8 billion Old Navy fashion chain off into a separate public company. Old Navy Inc will be run by Old Navy’s current president and CEO, Sonia Syngal. Gap Inc’s current CEO, Art Peck, will continue to head the remaining businesses - Gap, Banana Republic, Athleta, Intermix and Hill City, which will be held in a yet-to-be-named company. Following declining holiday results, the Gap brand is going to close 230 stores over the next two years.

Far fetched partners. Following its announcement to create a global e-commerce platform for British luxury retailer Harrods, online platform Farfetch has decided to merge its luxury operations in China with the country’s second largest online retailer, As part of the agreement (press release), fast growing JD will merge its Toplife platform for luxury products into Farfetch’s Chinese operations.


Supreme CBD. As the legalization of marijuana-based products like CBD continues in the US, cannabis companies like GTI-owned Beboe, Fleur Marché and Canndescent are trying to position themselves as top luxury brands. As part of this strategy, they are looking increasingly towards the fashion world for inspiration - and for fashion savvy personnel from luxury companies like Dolce & Gabbana, Gucci and Tom Ford.

The discount dilemma. Several factors including the proliferation of e-commerce, lengthy production cycles and oversupply (paywall) have led consumers to focus strongly - in some cases exclusively - on marked-down merchandise. Some brands and retailers have already countered by accelerating supply chains and dropping in-season product lines and collaborations in limited editions, but many remain trapped in a vicious cycle.


Remaining relevant. Two US discount specialists are tapping into new territories. For the upcoming summer sandal season, Designer Shoe Warehouse DWS is rolling out its W Nail Bar, offering manicures and pedicures as well as waxing services and a wine bar. Later this year, TJX-owned off-price retailer Marshalls plans to launch an e-commerce site to recreate the concept’s typical “treasure hunt” experience as well as drive traffic to stores through an in-store return program for online orders. TJX’s T.J. Maxx already offers e-commerce.

The end of the affair. Amidst increasing competition, US retailer J.C. Penney has decided to discontinue its Big & Tall clothing subscription service, which launched in partnership with Bombfell in 2017. Big & Tall offered menswear in large sizes from both J.C. Penney private labels and national brands. Recent newcomers in the space include American Eagle Outfitters, Universal Standard and Foot Locker through its purchase of Rockets of Awesome. To save costs, J.C. Penney will also close 24 additional stores.


Keeping the legend alive. Following Karl Lagerfeld’s death in Paris last week, French fashion house Chanel has now named his close collaborator Virginie Viard as well as Eric Pfrunder co-ceative directors of the $10 billion brand. Viard, who was immediately entrusted with the creative aspect of the collections, was officially named artistic director of fashion, while Pfrunder will oversee all marketing as artistic director of fashion image.

Mourning Margaret Hayes. Losing her battle with breast cancer, Margaret Hayes, president and CEO of Fashion Group International, passed on (paywall) yesterday. Hayes joined the New York-based non-profit organization for the benefit of the fashion industry in 1994. Previously, she held positions at Saks Fifth Avenue, Movado and International Flavors & Fragrances. Hayes was 79 years old.


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