Closing The Gap

October 25, 2011

Recently, The Gap announced that it would be closing 21% of its stores in the United States by 2013. What has happened to this corporation that once set the standard of aspiration for other retailers?

Recently, The Gap announced that it would be closing 21% (approx. 189 stores) of its stores in the United States by 2013. When you think about the monolithic size of this brand, you realize that 21% is a large number. What has happened to this corporation that once set the standard of aspiration for other retailers?

In the late 80s and 90s, The Gap was the leading retailer in the non-fashion fashion market. Having connected with their clients on such an intimate level, their non-branded t-shirts, jeans and sweatshirts were enough to boost and establish them as the Who’s Who in the brand world. How far the mighty have fallen.

When The Gap put high fashion in their sights, they began their downward spiral. Feeling confident and comfortable in the mid 80s, The Gap acquired Banana Republic and established it as the luxury retailer. Banana Republic has done quite well fulfilling this role with The Gap even trying to attempt to ride Banana Republic’s coattails. They ditched their brand loyalists (those t-shirt, jeans and sweatshirt wearers) and have introduced more frilly, sparkly and tailored looks. They are hoping for shoppers who frequent Banana Republic but are on a budget. However, shoppers who appreciate high fashion are willing (and may prefer to) pay a premium for quality, style and the novelty of wearing a certain brand — although the logo may not be present. These high fashion clients are smart and recognize that The Gap style is not high fashion, and therefore no longer shop The Gap.

When The Gap became more budget-conscious, they began the process of self-cannibalism. In the mid 90s, Old Navy was introduced as the bargain shopper’s paradise. The Gap intended to provide lower income families with fashionable wear while keeping the middle class to themselves. But everyone knows that middle class America is quickly becoming a thing of the past. Shoppers on a budget are more concerned with the price tag than style, and therefore embrace Old Navy. Old Navy may not be as stylish, but it follows trends (and we can safely say these shoppers are trend-followers, not trend-setters). What is sold at Old Navy is tried-and-true both fashion-wise and practically speaking. So, unfortunately, The Gap has lost middle class America as well.

When The Gap failed to realize that their shoppers were transitioning to Banana Republic and Old Navy they found themselves sandwiched in the middle and lost their reason for being. While The Gap abandoned their core (and original) clients by giving up their t-shirts, jeans and sweatshirts to Old Navy and taking up more seasonal and ever-changing styles (competing more directly with Banana Republic), there were still enough shoppers to convince The Gap that there was a sustainable business. Over a twenty-year period, they opened numerous, large stores. However, when shoppers completed their transition to Old Navy and Banana Republic, began shopping online and tightening their purse strings with the challenging economy, many Gap stores were left empty. Very recently The Gap realized that real estate had not been a good investment.

The Gap brand has tried to get back to their roots by competing with designer jeans and introducing the 1969 line. They also hired a new CEO with no fashion experience. But 1969 can’t hold a candle to other jean designers, and the CEO has been unable to reclaim Banana Republic and Old Navy shoppers, or any other competing retailers shoppers for that matter. The only hope for The Gap, aside from closing stores in the US and submitting itself to its two counterparts, is to reignite the flame with its core clients, and get back in touch with the original brand experience that made them so successful in the first place.

blog comments powered by Disqus
Brandlogic and CoreBrand have become Tenet Partners — Where brand meets innovation®. More