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The Rise and Fall of GAP

Avtar
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When Donald Fisher and Doris F. Fisher opened the very first store of their new clothing brand GAP, called ‘The Gap’ in 1969 San Francisco, they would not have anticipated the rise and fall of one of the most iconic American clothing brands in the world. Soon after its opening, GAP was on an upswing, rapidly opening stores across the United States. It wasn’t long before the store opened at multiple international locations.

GAP was creating an upscale brand image with aspirational campaigns. The brand’s 1980 campaign called ‘Individuals of Style’ featured black and white images of musicians and cultural influencers posing seriously in GAP clothes. Their ‘Who Wore Khakis’ campaign of the 1990s, was also a hit as it managed to turn an ordinary clothing article into a must-have for every wardrobe; by showcasing images of famous historical figures wearing khaki pants. GAP served as the go-to destination for Americans for easy and casual t-shirts, hoodies and denim. 

GAP’s glory days were when the insanely popular sitcom, Friends, was on TV and the brand’s khakis and ‘GAP’ logo hoodies were essential fashion garments. GAP gave customers a sort of uniform, which worked well for Generation X. They innovated a lot – with products and as well as with marketing, also being the first fashion brand to air TV advertisements. 

Over the years, whether due to fast fashion, the Internet or something greater, GAP’s iconic status has faded. Today’s consumers desire fashion that is individualistic. As a result, logos have faded as individualism has grown.

Gap Inc. announced earlier this year, that it is closing 230 of its stores and breaking away from its Old Navy brand. The company split into two separate companies – one being Old Navy and the other consisting of the other brands in Gap Inc’s portfolio: GAP, Banana Republic, Athleta and Hill City. This is meant to be a restructuring of sorts to revitalize the company and its assets. 

According to Gap Inc’s board, the stores are closing as they don’t fit the company’s vision for the future of the GAP brand. Also, because Gap and the Banana Republic have failed to maintain their position or grow in the contemporary retail landscape. These stores have underperformed in terms of profitability, customer experience, and traffic trends.

This move came after new statistics emerged which showed how Old Navy had outgrown GAP. The separation is a story of two hugely different businesses. Old Navy has performed quite well in recent years, with sales growing 3% a year in 2018. In contrast, the GAP has been struggling to make a profit with sales falling by 5% last year. Old Navy continues to outgrow GAP and has been making profitable sales since it first opened in 1994. In 2018, Old Navy opened 28 stores and completed over 80 remodels. Old Navy is estimated to drive 75% of Gap Inc’s profitability.

It is safe to say that Old Navy will be spearheading Gap Inc. and will be paving the way forward. Currently, the board is focused on setting up both companies for long-term value creation and profitable growth. Looking to the future, Gap CEO Art Peck said, “We think the best way for each company to grow and meet the evolving needs of our customers is to allow them to pursue tailored strategies separately.

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