Gap Inc. is one of the first U.S. companies to heed the call to raise minimum wages for its 65,000 U.S. store employees.
On Wednesday, chairman and chief executive officer Glenn Murphy said in a letter on Gap’s Web site that the company will make a strategic investment to increase the minimum hourly rate for employees to $9 in 2014 and $10 in 2015.
The move comes as there is growing pressure nationwide to raise the federal and state minimum wage rates. President Obama urged Congress in his State of the Union address to pass an existing bill increasing the national minimum wage to $10.10 an hour from $7.25 and indexing it to inflation by the second half of 2016. He also signed an executive order last week to require federal contractors pay federally funded employees a “fair wage” of at least $10.10 an hour. RELATED STORY: Minimum Wage Debate Becomes Global Issue >>
A bill that would raise California’s minimum wage to $10 an hour by 2016 was approved in September by the state legislature and subsequently signed by Gov. Jerry Brown. The measure would increase the wage from $8, the current minimum, to $9 an hour on July 1 and to $10 on Jan. 1, 2016.
The nonpartisan Congressional Budget Office said in a report released Tuesday that an increase in the federal minimum wage to $10.10 by 2016, a legislative proposal supported by President Obama and Congressional Democrats, but opposed by some retail groups, could lead to a loss of 500,000 jobs.
Gap said its decision had less to do with the California time frame than its desire to “do more for employees,” adding that it had been contemplating the move for some time.
Explaining the move to raise hourly rates, Gap said that over the last five years, “we’ve stayed ahead of others by investing in technology. And yet, a customer’s lasting impression is often shaped by the interactions with the people in our stores. To connect and enhance the in-store and digital experience for our customers even more, we must attract and retain great talent. As a result, we’re raising the minimum hourly rate for people who work in our U.S. stores.”
The increases will impact all of the company’s brands, including Gap, Old Navy, Banana Republic, Athleta, Piperlime and Intermix. Gap said 75 percent of its employees work on the front line serving customers.
The company said the majority of employees in stores and distribution centers earn more than the $7.25 minimum wage, but did not specify how much they earn.
“To us, this is not a political issue,” said Murphy. “Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over.
“The people in our company who engage directly with our customers carry an incredible responsibility,” he added. “Our success is a result of their hard work, love of fashion and commitment. We hope this decision provides them with some additional support as they grow their careers with Gap Inc.”
Murphy said the decision reflected the values set by Gap founders Doris and Don Fisher. “They invented specialty apparel retail, but Don also challenged us to live up to our promise to ‘do more than sell clothes,’” Murphy said.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)