Gap Inc. is investing tens of millions of dollars to boost operations at its Tennessee distribution center, underscoring the company’s focus on strengthening domestic operations under CEO Richard Dickson’s leadership.
Gap Inc.’s $58 million investment in its Gallatin distribution center, located on a 2.3-million-square-foot campus just outside Nashville, will create 100 new jobs to support the retailer’s growing use of robotics, automation and other infrastructure upgrades. Since its founding, the company has steadily expanded its presence in Tennessee, investing more than $150 million at the distrubution site and creating over 1,600 full- and part-time jobs in the region. To date, Gap is the largest private employer in Sumner County.
“This investment is a true testament to Tennessee’s business-friendly climate and pro-growth policies,” Sen. Bill Hagerty, R-Tenn, said in a statement, noting how Gap’s investment will “build upon the great impact it’s already had on Tennessee, help create more jobs for hardworking families, and bolster our economy for years to come.”
THESE COMPANIES HAVE ANNOUNCED THEIR INTENTION TO INCREASE US MANUFACTURING AMID TRUMP’S FIRST 100 DAYS
The Gallatin facility, the largest in Gap Inc.’s global distribution network, leverages robotics developed by Boston Dynamics to support retail and e-commerce fulfillment for Gap Inc.’s brands – Athleta, Banana Republic, Old Navy and Gap. The company said the facility also serves as a testing site for new logistics tools and technology.
“This $58 million project will further enhance our capabilities to meet the needs of our customers and support our team members with cutting-edge tools and infrastructure,” said Kevin Kuntz, Gap Inc. senior vice president of logistics. “Gallatin is a vital part of our distribution network and we’re honored to further strengthen our commitment.”
In 2023, Dickson, a former Mattel executive, was tapped to turn around Gap’s global apparel retail portfolio after the company endured years of declining sales.
Prior to his time at Gap, the company implemented various actions “simplify and optimize its operating model and structure,” including cutting hundreds of roles, decreasing management layers and creating a more consistent organizational structure across its brands. It also had a string of CEO changes.
TRUMP SEES ‘MANUFACTURING BOOM’ IN FIRST FULL JOBS REPORT OF SECOND TERM
But Dickson has a game plan to reinvigorate the company’s brands, which includes a major focus on investing in the U.S.
“With an American workforce of over 65,000, investing in the U.S. is an important priority for our business,” Dickson said during the company’s first-quarter earnings call in May.
Dickson also described how the company was planning on doubling its vendor sourcing of American-grown cotton in 2026 with about 90% of its sales in the quarter in the U.S. The company didn’t specify that its goals to invest in the U.S. were related to the Trump administration’s push to bring manufacturing back to the U.S.
Dickson said it’s been diversifying its sourcing footprint for several years, which has put it in a better position to “handle complex headwinds” such as tariffs.
Dickson warned in its May earnings call that the company could face a $100 million to $150 million to its business if President Donald Trump’s tariffs remain in effect, causing shares to fall.
Still, “we have a stronger financial foundation and we are operating with greater discipline, growing brand momentum, and improved platform capabilities,” Dickson told analysts. “The first quarter was yet another proofpoint that our strategy is working, and I remain optimistic yet realistic about the opportunities ahead as we navigate a highly dynamic environment.”
Despite the uncertain environment, Gap Inc. reported positive same-store sales for the fifth consecutive quarter, which was the three-month period ending in May. It also gained market share for the ninth consecutive quarter.
“We are lapping the early stages of our transformation, and our two largest brands, Gap and Old Navy, are winning in the marketplace and demonstrating the potential of our brand reinvigoration playbook,” Dickson said, adding that Old Navy and Gap are seeing growth across all income groups.
Read the full article here
