Sonia Syngal, CEO of Gap, believes Walmart is the perfect partner for the clothing retailer as the two companies strive to jointly bring a new private label to market.
“This is a new chapter for us,” Syngal told CNBC’s Jim Cramer on Mad Money Thursday night. “We love the size of Walmart, coupled with the coolness of Gap.”
CNBC reported the day before that Walmart had reached out to Gap to launch a private label called Gap Home, which will debut with around 400 items on Walmart.com and in many large retail stores.
This is the first time Gap has ventured into a category outside of apparel in an attempt to seek ways to license its globally recognized brand name. For Walmart, the deal provides an opportunity to hopefully drive more home sales – and attract new customers – while increasing the choice of exclusive brands online and in stores.
“Gap is one of the best-known brands in the world,” Syngal told Cramer. “And brands don’t die. … If we are strong at home, we can build the brand around the world with confidence and momentum.”
“What we are doing is restructuring the business model of how we are making the money [Gap] Brand, “she added.
Gap also reported fiscal first quarter sales on Thursday, surpassing pre-pandemic levels, as shoppers reached out to Old Navy and Athleta to freshen up their wardrobes before the summer months.
The retailer increased its sales outlook for the full year and sent its stocks higher in expanded trading. Gap’s namesake banner in North America is also showing signs of improvement. Meanwhile, e-commerce growth remains strong as more and more people leave their homes and return to the mall.
Syngal told Cramer that consumers are currently looking for a mix of “comfort and cocktail dresses”.
While people are eager to get dressed again and socialize, they still want to wear leggings and sweatpants around the house. And Gap will benefit because it has a mix of brands under its roof that offer a variety of styles and prices, she said.