Gap Inc. is an iconic American retailer, having established itself in 1969 and now operating across four brands – Old Navy, Gap, Banana Republic, and Athleta. It has experienced a period of fallouts, repeated failed attempts to reboot the brand, and a lack of consistent leadership. The most recent example of this being the short-lived partnership with rapper Kanye West a.k.a Ye, which was meant to bring the Gap brand back to prominence but ultimately ended in disappointment.
Chairman Bob Martin has declared that Gap will be receiving a new CEO from outside the company and this leader will be responsible for restoring the Gap brand to its former glory. Reviving the business will require focus on the core problems that have enabled its demise – lack of coherent or distinguishing apparel design; too many stores; cluttered stores; and lack of consistent leadership.
The iconic retailer can tap into the sentiment of nostalgia for Y2K brands and emulate the revival of companies such as Levi’s and Abercrombie & Fitch. All three of these companies saw their popularity decline as shoppers preferred online shopping and fast fashion over the traditional mall destination. However, the cyclical nature of fashion trends, accelerated by social media platforms such as TikTok, have seen nineties fashion become fashionable again.
Gap Inc. have yet to capitalize on this trend with their apparel designs, which remain out of touch with the sensibilities of today’s shoppers. As a result, same-store sales have continued to decline and will require a dramatic transformation to return to profitability.
The path towards this transformation can be seen with Levi’s Strauss and Abercrombie & Fitch, who followed the turnaround playbook of reducing number of stores and revamping ageing store fleets. Furthermore, the two companies focused on utilizing influencers on social media and making fashion-forward designs that resonated with customers, rather than sexualized marketing strategies seen in the early aughts.
Gap Inc. is primed for this type of transition, having recently closed its under-performing stores and pushed Old Navy – a go-to basics retailer – during uncertain economic climates as customers prioritize cost efficiency. However, this transformation will not occur without the clear leadership from their soon-to-be named CEO. By following the footsteps of their peers, Gap have the opportunity to take back their place in American culture and become a sought-after destination for younger shoppers.