Weddington Way, acquired in 2016 by Gap Inc., is in the midst of shutting down, the bridal startup announced on its website last week. The brand is leaving the space it occupies in many Banana Republic stores and hopes to operate online "indefinitely," according to a note to customers on its site.
Gap Inc. confirmed to Retail Dive that it's exiting the brand, emphasizing that it was a small acquisition "made to explore new types of community based e-commerce." A Gap spokesperson also said in the email that, "While the business is performing well, we determined that Weddington Way would take time to scale in an impactful way for Gap Inc."
Weddington Way is closing the 13 U.S. test stores over the next three months, and, to ensure minimal impact to customers, will continue taking online orders until at least June 11, Gap Inc. also said, adding that it's working to redeploy any impacted employees to positions within its other brands, where possible.
Gap took on Weddington Way just about the time that J. Crew gave up on that slice of business, closing down its own decade-plus-old wedding apparel and accessories sales amid plummeting demand. It's a tiny ($2.5 billion), highly competitive market dominated by local, independent players, according to Shelley Kohan, a professor at the Fashion Institute of Technology, and that shrinks further when the specialty is bridal apparel.
"When focusing solely on bridesmaids dresses and accessories, the market for bridal stores shrinks to less than $1 billion and would prove difficult to scale at the trajectory needed for positive financial impact for Gap Inc.," she told Retail Dive in an email, adding that the move is "not a surprise."
Gap may have undermined the unit's prospects by tying it up with Banana Republic, which, although it has a somewhat more upscale position than the more casual Gap and Old Navy siblings, is struggling. Last year Banana Republic closed 30 North America stores and opened just five, and same-store sales were down 2% for 2017, coming off declines of 7% the year before and 10% in 2015. Last month the company said that its ongoing brick-and-mortar reduction will continue to be centered on Banana Republic and Gap stores.
"While Gap Inc. was smart to explore niche online companies to acquire to shorten the learning curve on the digital side of the business and expand their target market, the bridesmaid category may have been too much outside their core merchandising strategy and the market too niche to significantly impact profits for Banana Republic," Kohan said.
Even worse, perhaps, the demographics are a mismatch, and opportunities are shrinking. "Banana Republic's market is 25-35 years old, whereas 62% of the bridal target market is 25-44," she also said. "As marriages decline and millennials are pushing back their special days, the growth in the market will come from 29-39. The bridal store business is expected to be flat for the next few years with the drop in marriages to be offset by higher spend on bridal apparel."
The shut-down comes after Gap Inc. last year unveiled a new growth strategy centered on its dependable Old Navy brand and its swiftly growing Athleta activewear unit amid shakeups in its brand leadership.
The closure of Weddington Way, indicates that Gap Inc. is further refining its brand portfolio. While the acquisition may have made sense in light of the shift from stores to e-commerce, it wasn't necessarily a good move for Gap.
"Acquisitions and collaborations have to make sense for the brand, like the synergy between BHLDN and Anthropologie, which hits the prime bridal demographic (28-45) and where the merchandising aligns with the brand strategy of Anthropologie," Kohan said.