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Gap: where did it all go wrong for the iconic 90s brand?

The Drum 02 Jul 2021 06:00

When Gap appeared on British high streets in 1987, its particular brand of all-American fashion proved an instant hit. Three decades on, however, it had lost its distinctive appeal and yesterday (July 1) shuttered all 81 of its UK stores. So, where did it go wrong?

The closure of Gap stores was not a total shock. The fashion giant hinted at troubles earlier this year when it said that it was reviewing the profitability of 19 outlets. Global sales for Gap Inc, which includes sister brands Old Navy and Banana Republic, were down 16% to $16.4bn last year.

But the decision to pull out of the UK and Ireland, with the estimated loss of more than 1,000 jobs, was unexpected. “The closure of Gap’s bricks and mortar brand definitely feels like a big one, up there in Woolworths and HMV stakes as a fallen high street idol,” says Ben Mooge, chief creative officer at Publicis Groupe UK.

Failure to adapt

Gap’s biggest problem was its fundamental inability to adapt and innovate. When it first arrived, Brits lapped up its laid-back American style, sitting somewhere between teen brands like Topshop and the grown-up M&S. Its denim was a Levi’s alternative and its baby and kids wear gave value to parents who still wanted their children to look cool. And then it got complacent.

As the fashion market moved to a faster model and shoppers shifted online, Gap remained resolutely the same. It stood by the tried-and-tested model of distributing the same product across markets with little variation and passively watched as cheaper competitors such as Primark and H&M, with their infinitely more efficient supply chains, got to the younger online shopper quicker. The rise of sports brands crossing into fashion was the death knell for the original athleisure brand, eating up any market share Gap had left.

Its solution – at least in the UK – was a disastrous cycle of discounting that eroded its value. Not a month went by where an email wasn’t sent offering significant price reductions across its website.

Advertising woes

“It had such confidence in the brand, knew its white world as clearly as Apple knew its colored one," says Mooge. “Its logo was as big a stamp as HBO or Netflix. It had Spike Jonze making ads long before he made Apple ones.”

“The last hurrah in advertising terms over here was maybe Kim Gehrig’s film of three years ago,” says Mooge. “And that’s the problem. When Uniqlo has the look and H&M has the story, standing still is going backwards.”

After the last stores shut in September it will continue to have an online presence in the UK, with the company saying in a statement that it strongly “believes in Gap’s global brand power” and that it will be “executing against Gap’s power plan...to amplify our global reach”.

In its first quarter earnings, chief executive Sonia Syngal said the team was focused on building relevance in the US – where sales were up 9% – “which gives us the power to export that relevance globally”.

Its new CMO Mary Alderete told The Drum in an interview last year that it wanted to be the brand face of "modern American optimism" but it's anyone's guess how this will translate across the pond and help it compete with the brands that have eaten away its marketshare.

Sharon Jiggins, chief marketing officer at FCB Inferno, is more positive on Gap's outlook, saying the end of its bricks and mortar operation gives it a "huge opportunity" to reinvent itself in the eyes of British shoppers.

“Plus, it has some great initiatives, like its Generation Good sustainable clothing range, hidden away. So maybe this is the time for Gap’s brand personality to come to life in the e-commerce world, moving from a functional sales window to a lifestyle brand that truly reflects today’s customer.”

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