A few years ago, Gap realized that telling its customers to “Dress Normal” wasn’t such a great idea: customers were turned off, and sales plummeted. That air of normalcy is still plaguing the company.
Basics are all well and good, but things have changed from the time when Gap’s business was booming in the mid-2000s — wearing a “uniform” that’s easily recognized as a clothing brand just isn’t cool anymore, Bloomberg reports, and it shows in their sales: comparative store sales fell 3% at the company’s namesake brand last quarter, Gap reported this week, and it’s worse at Banana Republic, where sales sunk 9%.
“They were the cheap, cool option,” Bridget Weishaar, an analyst at Morningstar, told Bloomberg of Gap’s heyday at the turn of the century. “They’ve just been displaced.”
As a result, the company is planning to close dozens more of its 3,700 stores, and Chief Executive Officer Art Peck says he’s “unsatisfied” with the slow recovery.
Some analysts think Gap’s various businesses — including Gap, Old Navy, Banana Republic, Athleta, and Intermix brands — have just gotten too big for their britches.
Simeon Siegel, an analyst at Nomura Securities, wrote in a note to clients with that concern, Bloomberg notes, saying he thinks Gap is “simply too large in the new normal where physical distribution has become a liability and uniformity is no longer ‘cool.’”
Gap Faces a World That Doesn’t Want to Be Normal Anymore [Bloomberg]
by Mary Beth Quirk via Consumerist
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