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09/13/2021

Gap Inc. invests over $100 million in supply chain infrastructure

Dan Berthiaume
Senior Editor, Technology
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Gap Inc. is expanding its fulfillment capacity in time for the holidays.

Gap Inc. has expanded its fulfillment capabilities in time to meet increased holiday demand.

The specialty apparel retailer has completed the expansion of its fulfillment centers in Phoenix, Ariz. and Gallatin, Tenn.  Gap focused the $100 million-plus investment on increasing speed, flexibility and efficiency at the two centers.

The expansions at the company’s 1.4-million-sq.-ft. facility in Gallatin and its 400,000-sq.-ft. facility in Phoenix now enables online order fulfillment for more of its brands. Earlier this year, Gap announced plans to open a new, 850,000-sq.-ft. customer experience center in Longview, Texas to support Old Navy’s growing online business.

Similar to its other customer experience centers, the new Longview facility will include best-in-class fulfillment technology and automation to meet customers’ ever-evolving needs. Gap also plans to expand capabilities at its Fresno, Calif., and Fishkill, N.Y., customer experience centers next year as well. 

“Our goal is to always deliver an exceptional experience for our customers,” said Kevin Kuntz, senior VP, logistics at Gap Inc., “and scaling our operations in Gallatin and Phoenix is just one of the many ways we’re able to do that in a continuously evolving marketplace. By expanding our engineering capabilities and increasing automation, we’re delivering on our Power Plan 2023 growth strategy. We’re able to serve customers no matter where they shop, and we can work more efficiently than before—all while creating even more job opportunities and reallocating our workforce in new ways to develop new skills.”

Gap has also been deploying artificial intelligence (AI) solutions and robotic technologies in its fulfillment centers – both creating more processing power and more automation. In March the company, which already leverages Kindred Sort robots to pick online orders in its U.S. distribution centers, contracted with systems integrator Advanced Handling Systems (AHS) to design and integrate an Exotec Skypod System to optimize its returns picking process.

France-based pick systems company Exotec Solutions provides 3D mobile Skypod robots that can transfer bins of product to a picking operator from a mass storage area with 10-meter-tall racking. Laser scanner navigation enables the Skypods to navigate in a multidirectional manner while carrying bins of up to 30 kg. This capability is designed to free up time for warehouse associates to focus on packing and shipping, avoiding long-distance walks to obtain inventory.

As previously reported, the retailer is moving to a business model that is driven by e-commerce and off-mall locations. The retailer is planning for e-commerce to account for about half of its sales by fiscal 2023. Gap sales totaled $4.2 billion in the second quarter of fiscal 2021, up 5% compared to the second quarter of 2019. It was the chain’s highest second-quarter sales in more than a decade. Online sales grew 65% versus the second quarter of 2019 and represented 33% of the total business for the quarter.

Gap Inc. operates stores under its namesake,  Old Navy, Banana Republic and Athleta banners.