Gap’s Latest Plan to Turn It Around

Discussion
Jun 08, 2006
George Anderson

By George Anderson


“It’s déjà vu all over again.”


Gap Inc. has announced yet another new plan (strikingly similar to past ones) to turn its struggling business around.


The company, according to Cynthia Harris, president of U.S. Gap stores, will focus on clothing that is “casual and confident.” The fashions, will feature designs, she described as “updated classics.”


The Gap intends to reconfigure its locations into four primary shops within each store to better serve consumers. The new departments, scheduled to roll-out in July, will include a denim shop, an activewear shop, a t-shirt shop and a “clean shop” that will sell items such as khakis, skirts and woven tops.


The store merchandising will be reconfigured based on seasonal influences, according to Ms. Harris. For example, the t-shirt shop will most likely be front and center during the summer selling period while others will move depending on the opportunity of the moment.


Pat O’Hare, an analyst with Briefing.com, said, “Anything will help Gap at this point. They need to do something to really improve the store experience.”


Another area where Gap is looking to improve is on its ability to shorten the cycle in which it brings new items into the store. It has watched as so-called fast fashion retailers such as H&M have quickly moved in new clothing to meet consumer demands while its stores have focused on a longer term seasonal in-and-out approach.


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Gap’s latest plan to get its business turned around? Where do you see the greatest
opportunities and the most significant hurdles?

George Anderson – Moderator

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9 Comments on "Gap’s Latest Plan to Turn It Around"


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Ian Percy
Guest
14 years 8 months ago
There is an inevitable life cycle to every living organism, including retail chains. The company is launched, it emerges into the market, it becomes fully established, it matures and plateaus, and then it declines and dies. There is no escape. UNLESS – a reinvention or transformation happens early in the maturity stage. Most companies don’t read ‘the handwriting on the wall’ until it is too late. GAP may be one of those. Success has a way of blinding you to your own mortality. Transformation is not about changing inventory mix, the logo or your advertising agency. It’s about changing how you think. If how you think doesn’t change, neither will your results. The team that leads the company up to the brink of decline is rarely the team that can transform it because what is needed is a new mindset. Putting t-shirts out front during the summer is hardly the evidence of new thinking. In my experience, transformation or reinvention basically needs to follow this flow: 1) a willingness to identify and confront current mindsets;… Read more »
Mark Lilien
Guest
14 years 8 months ago

The hottest Gap competitors, so hot they’re really in a different market, are firms like Aeropostale and Abercrombie & Fitch. The Gap needs a hot (sexy) repositioning. The audience doesn’t “need” clothes. They “need” to feel hot and sexy. The Gap doesn’t broadcast those vibes.

Bernie Slome
Guest
Bernie Slome
14 years 8 months ago

The Gap reminds me of the Kansas City Royals. Why, you may ask? Because at one time they were both elite contenders. Both have fallen upon hard times and both are forever coming up with a new plan to right the ship.

I give Gap credit for trying something new and not giving up. The question that must be asked is, why are they not succeeding?

The Gap looks like it is trying some “tried & true” concepts. At this point, as my mother used to say, “It can’t hurt”. The Gap needs to listen to what their customers want and then deliver. They need to measure the customer experience and they need to, then, retrain their employees and deliver the right products at the right price with the best customer service. That will guarantee a great customer experience which, in turn, will help them right their ship.

Karen McNeely
Guest
14 years 8 months ago

I think the Gap needs to better define who its target audience is. Do they want to be young and hip? If so, they don’t seem to be working it. Do they want to age gracefully, taking their previous devotees with them? Then put in the merchandising and marketing to that group. I know they were testing a new store concept marketing to an older age group, but I haven’t heard much about that recently. Right now, they seem to be nothing to anybody.

I would also say to some extent they have done it to themselves. I think that Old Navy has done a lot to steal market share from the Gap division. A little hipper, a little trendier, a whole lot cheaper… who cares if you throw it away after the season; it’s not in style anymore anyway!

Don Delzell
Guest
Don Delzell
14 years 8 months ago
The GAP has lost relevance with its customer base. In fact, it has lost relevance with any customer base of sufficient size and spending power to sustain its current level of operations. The first step in regaining relevance is to identify the group to be relevant to. By the description of the merchandise and the shops in store, apparently this has been done. Although, in truth, we’ll have to see how the different programs are implemented to truly know. Of course, the GAP must determine why they can be more relevant to this target group than other existing competitors. I’m not sure I’ve heard this articulated. T shirts, denim, activewear and preppy…..I think that these “needs” are already being met in the market place. What will GAP do differently or better or in a unique way? So far, I don’t hear it or see it. Certainly the focus leverages the existing store environments, and the brand legacy. But is the brand legacy an asset to the customer group being targeted? Has the GAP been so… Read more »
Carol Spieckerman
Guest
14 years 8 months ago

The shops-within-a-store concept will hopefully clean up some of the confusion that you see in Gap stores these days (women’s, men’s, pet, intimates, fragrance, denim, casual, career-ish, hats, accessories…all buried in a sea of khaki and white – whew!) and help them highlight strengths (their denim does have devotees) however, as pointed out by previous posters…what does it all mean? Does the “clean shop” mean that they’re going to own clean? The problem here is that while Gap was futzing around, H&M, Zara, American Apparel, Target and even their own cannibalizing Old Navy (ouch) began out-Gapping the Gap…now a whole ‘nother crop of encroachers are heading their way…Steve and Barry’s, Uniqlo, and yes, Wal-Mart…buttery tees, khaki and denim are such a commodity and Gap hasn’t put the required marketing muscle behind intimates (a category that one stumbles upon once in the store)…I just don’t see how they can pull it out.

Santiago Vega
Guest
Santiago Vega
14 years 8 months ago

Here we go again: The Gap has found a “new” new strategy.

I don’t know if there are industries where playing it safe may be the way to go, but retail is definitely not one of them, especially if you’re in the apparel and fashion segment.

A while ago, it became clear that they were good at cutting costs but were completely lost regarding how to improve their business past the stage of operating efficiencies. It’s as though they mean nothing to any specific demographic anymore. Nobody knows what they stand for.

Whatever happened to being distinctive and innovative? And why hire designers and marketers if you’re going to give them a very short leash? Talk about killing their inspiration!

Bottom line, Gap has a dull vision, a dull marketing strategy and a dull product line. It’s time to wake up and “un-dull” yourself!

Bill D'Arienzo
Guest
Bill D'Arienzo
14 years 8 months ago
All of the commentators are in agreement that The Gap is moving either in the wrong direction or has seen its better days…all agree that it needs to reinvent itself. Like Buick, Mr Pressler & Co has made the error of not following the partner who bought her to the dance and made her the belle of the ball!…both the early and late Baby Boomers…potentially a huge, affluent and growing market that knows and loves the brand. This, to me, is the key issue. From latter day Drexler on forward, they have systematically severed the emotional connection between the loyalists and the brand…the final coup de grace came in the Sarah Jessica Parker debacle. (Can we really call it a campaign!) Like Buick, the Gap brand has become irrelevant because it refuses to be who it really is…it has lost Authenticity and with it, Integrity. Like a person no longer trusted, it has lost the friendships that it nurtured for so long. Buick continues to spend tens of millions of dollars using Tiger Woods to… Read more »
Paula Rosenblum
Guest
14 years 8 months ago

I think at some point the consumer woke up and realized that the core Gap product line is a commodity and can be bought cheaper elsewhere. Mark L is right on in his comments above.

A white T-shirt is a commodity, even if Sharon Stone wore one to the Oscars 10 years ago to great acclaim. Gap has too many stores, too high prices and serious need to re-invent their product mix. They’ve got to get faster and create more variations on the theme. Otherwise, cheaper knock-offs are just as good.

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