That handsome gentlemen to the left is former Gap CEO Paul Pressler. As you may well know, he resigned Monday ("Gap CEO Pressler Resigns," SFChron, Jan 22, 07). The Gap is now in the unpleasant position of finding a new CEO to rescue a sinking brand. ("Gap Needs a CEO and Many Qualify; Will Any Apply?" WSJ, Jan 24, 07)
Here's the money quote in that article:
Perhaps Gap's biggest problem -- and the new CEO's biggest challenge -- is that it has lost its way with American shoppers who once flocked to its Gap, Banana Republic and Old Navy stores as the darlings of the mall. The Gap brand is now so large that it can't be too trendy, or it might not appeal to enough customers to keep its stores running. But to make its styles attractive to a huge group of shoppers, it produces clothes so basic that they can't command a price premium.
This really is a problem. An interview Teri Agins did with fashion consultant David Wolfe summed up the woes any basic clothing vendor faces:
THE WALL STREET JOURNAL: What's the biggest change across the greater fashion landscape nowadays?
MR. WOLFE: I think there is going to be this big breakdown of the whole system. I think there is going to be a clothing/apparel industry that dresses the great American public in casual everyday clothes. And then there are going to be the fashion specialty chains -- the fast-fashion people, the boutiques, whatever you want to call them, who deliver fashion with a capital "F." At every price point.
WSJ: Now that Americans at every level can buy the newest fashion looks at every price level, have their tastes become more sophisticated?
MR. WOLFE: I think there is no such thing as a broad-based American mainstream anymore. And that's one of the major problems that fashion retailers are having at the moment. Instead of becoming one great homogenized society, after the Internet we are now much more segmented and layered..
-- "Goodbye, Mainstream," WSJ, Jan 22, 07
The interview goes on to note that size isn't always an asset: the larger you get, the greater the pressure to appeal to more shoppers, and the more homogenous the clothing.
So here is my crazy suggestion the Gap can grow by shrinking. Take Forth & Towne. (which we have, here and here and here and here and here) That chain is tiny, yet that chain has fans, if MayLynn's recent post "Forth & Towne? No. Forth & Love" is any indication. So maybe it's time to convert some Gap stores to Forth & Towne. It gives Gap the chance to redefine a market niche early on -- setting itself apart from Chico's, for example -- and create a group of loyal shoppers. Loyal shoppers = higher same-store sales, which make for happier investors.
Alternately: the Gap can take a page out of the J. Crew playbook (which, heh, was written by former Gap CEO Mickey Drexler -- see "Mickey Drexler's Redemption," NYMag, Nov 29, 04). I vividly remember the company's relaunch of its flagship catalog in fall 2003, and here's what stuck out: the total number of items for sale dropped dramatically, the total number of looks in the catalog narrowed dramatically, and each (much more expensive) item came with a backstory explaining why the materials or craftsmanship made this a new basic for a discerning customer.
And the company's continued that strategy -- in some circles, the names "Wellesley cable" or "Sophia short dress" are now cultural shorthand and collectible items. J. Crew seems to be continuing that with their new, more casual brand, Madewell 1937. It's not enough to buy a pair of jeans -- you have to get an education on the washes and hand-finishing.
Pretentious? Probably. Effective. Probably. People who buy something from J. Crew or Madewell have an idea what the brand stands for -- who "probably" buys it. And as a smart woman told me in 2005," What does the Gap stand for? Nobody has any idea."
So maybe the company needs to grow by closing some doors. Shut down some stores, pour some love into F&T, then look at the Gap and decide, "This is who we are for and this is what they want." Everyone else? Well, they're not shopping there now. Who cares what they think?
(EDITED TO ADD: And, in reading this recent report on a speech he made at the National Retail Federation's, it seems like I am not too far off my assessment of Drexler's J. Crew strategy:
He dismissed the notion that the popularity of "fast fashion," or the type of low-priced, trendy merchandise sold at chains like H&M, has shrunk demand for high-priced, high-quality clothing. J. Crew sells mid-to high-end clothing and accessories.
"At the end of the day, there are enough customers buying high-quality products. But it's our job as merchandisers to create the needs and wants of customers," Drexler said. "That's what I do for a living."
-- "Drexler: American Retailing Lacks Inspiration," CNN, Jan 16, 07)