It’s been a long time coming, but Gap may finally be waking up to the fact that a brand can’t live on cost-cutting alone. Speaking at the Bank of America 2009 Consumer Conference, chairman and CEO Glenn Murphy, a man who to this reporter has often seemed missing-in-action, said Gap hasn’t been played the hand it was given as well as it should have, and that it was “unacceptable” that the company was losing market share. Amen, on both counts, I say.
Murphy was frank in cataloging the company’s failures, starting with its namesake division’s unexciting, uninspiring and outdated store fleet. He acknowledged his disappointment that Old Navy was not gaining market share at a time when other low-cost value formats were gaining. He also said “shame on us” with regards to the fact that the brand’s store design has remained virtually unchanged since it launched 15 years ago.
Looking to the future, Murphy implied that changes are in the works. Old Navy is testing two prototypes, and Gap will debut a new store design in the third quarter. Banana Republic also has a pilot store in the works, along with a new store design.
It will be interesting to see how this all plays out. Gap has promised a lot over the past several years, but hasn’t done a very good job when it comes to the follow-up. I don’t know if the brand can ever regain its cache, but now -- a time when many of the companies, including Abercrombie & Fitch, that took away its market share are struggling -- would be a good time to try. One big thing in the company’s favor is its balance sheet: Gap has no debt and is sitting on $1.8 billion in cash. That’s not a bad position to be in these days. Gap should use it to its advantage.
— Marianne Wilson
1 comment:
Gap is a great brand, but it seems to be wandering in nostalgia as far as its marketing goes. The transformative "Individuals of Style" campaign-- deploying portraits shot by Annie Leibowitz, Herb Ritts, Matthew Rolston, and others to make the chain seem an arbiter of all things hip, cool, and contemporary-- is now 20 years old and still gets trotted out regularly in one guise or another. Gap needs to position itself as new and fresh for contemporary shoppers, not a greatest hits nostalgia trip for baby boomers.
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