Forget about opening early on Thanksgiving as a way to draw holiday shoppers. The Gap Inc. (NYSE: GPS) division Old Navy will give one shopper $1 million on Black Friday. Clothing retailers with stores near Old Navy ones may as well shut their doors that day. In detail:
Old Navy announced today it will give away $1 million to one lucky shopper this year on Black Friday. The first 500 shoppers at every Old Navy store in North America when it opens for Black Friday shopping will be given a chance to win the $1 million jackpot in the “Overnight Millionaire” sweepstakes during the brand’s biggest sale of the year.
The plan raises the ante in what is already a remarkably high-stakes game to draw shoppers over the Thanksgiving/Black Friday weekend. Tactics already announced by large retailers Wal-Mart Stores Inc. (NYSE: WMT), J.C. Penney Co. Inc. (NYSE: JCP) and Kmart are to open doors for most of Thanksgiving. The Kmart plan has drawn public protests over concerns that employees will not be with their families. Those workers might, however, make time and a half or double time.
The Old Navy decision is not a direct threat to full-service retailers, but for niche clothiers, particularly targeting young people, the sweepstakes could trigger problems. Shares of Abercrombie & Fitch Co. (NYSE: ANF) have already been bludgeoned due to a forecast of falling sales and a plan to close stores. Its shares trade at $33, near the 52-week low and well off the 52-week high of just above $55. Smaller rival American Eagle Outfitters Inc. (NYSE: AEO) recently revised its earnings forecasts higher for the current quarter due to better margins. Its shares, however, remain near one-year lows.
The Old Navy plan may cause enough interest that its rivals have to offer similar programs. Like the “open early on Thanksgiving” ploy, once one retailer tries to use it as an advantage, its rivals often believe they must follow.
For those planning to win the money, read the fine print:
For “Overnight Millionaire,” the first 500 people to line up at each store when it opens for Black Friday shopping will receive a game card giving them a chance to win the sweepstakes. More than 700 stores will open at 7 p.m. local time on Thanksgiving, November 28 (store hours may vary, check local store for details). The winner will be randomly selected on November 29 at 7 p.m. PT/10 p.m. ET. Full rules can be found at https://oldnavy.promo.eprize.com/million/.