You probably have no idea who won the Oscars in 1996, and I don’t either, considering it was probably broadcast past our bedtimes. But as a piece of fashion trivia, that event stands out as the night when Best Actress nominee Sharon Stone made the daring move of pairing her couture ball gown skirt with a plain white t-shirt. The t-shirt was the antithesis of “dress up,” the antithesis of stuffy and the ultimate in simplicity. The t-shirt was from the Gap. In 1996, believe it or not, the Gap was cool.
This month, the Gap has announced it will be closing 200 retail stores in the U.S. by 2013, amounting to one fifth of total stores. With anemic sales for the last few years and some tumultuous corporate turnover, the mega-brand is truly faltering.
Starting off as a California-based merchant for LPs, denim and t-shirts in 1969, the Gap evolved into a major player in U.S. retail in the 1990s. In 1995, fashion executive Mickey Drexler was promoted from President to CEO, launching the company on a meteoric rise through the 1990s, as they opened Old Navy and defined American style. Drexler took sales growth from $480 million when he joined in 1983 to $14 billion in 2000. In the fashion industry, people would joke that, “If you work for Gap you wear Gucci, if you work for Gucci you wear Gap.”
But while the Guccis and everyone else peddled fashion trends, Gap stuck to basics, using upbeat advertising to differentiate the product. One example of this is an ad campaign with fun images of American legends like Sammy Davis, Jr. and Marilyn Monroe clad in khakis. Another was a West Side Story-themed TV spot in 2000 with models wearing turquoise, red and yellow denim jackets and dancing like the Sharks and the Jets. By this point Gap was opening stores at the rate of one per day.
But by 2002, even “merchant-prince” Drexler couldn’t keep up Gap’s momentum. With retailers like Walmart and Target offering the basics at rock-bottom prices, competition became stiff and Drexler left Gap to perform his magic at J.Crew. Since the early 2000s, Gap has suffered from a continuing identity crisis, confused about its core product and core market. Gap has been a hot topic in recent business and fashion media, since it seems, in a sense, “too big to fail.” But that is part of the problem. Cash flow issues have arisen because Gap has too many stores that are under-performing. Moreover, it has lost cache by being so ubiquitous.
In the last decade, other major players have swooped into the basics market and eaten Gap for breakfast, lunch and dinner. Just recently, Inditex (owner of Zara) surpassed Gap as the world’s largest retailer. Then there are American Apparel, Urban Outfitters, J.Crew, and Forever21. This is partly the victory of “fast fashion” over traditional systems, but it is also a story of style.
Gap hasn’t had a CEO who is also an expert in fashion since Drexler. It’s latest creative director, Patrick Robinson, was fired last spring after stagnant sales. It has attempted to jump on lots of bandwagons, from designer capsule collections to green fashion, with little success. This is a fascinating case study for large apparel firms, because Gap’s last chance at resurrection will be solely based on style. They have production systems, sales channels, distribution methods, advertising and brand recognition up the wazoo. The only variable that isn’t working is design.
Although Gap is about the 99%, I think it could take a clue from the 1%, or in the fashion industry, couture. In recent years there have been a slew of comeback brands that have revived their images by keeping to a few signature motifs, like Givenchy or Balenciaga. Gap could easily do the same, sticking fiercely to Americana and taking risks with denim, khaki and white poplin and jersey shirts, essentially creating two lines of clothing — one of aspirational pieces and one of basics, and purposefully avoiding the very tricky and oversaturated middle-ground. That is exactly where they have faltered — they are spicing up their tried-and-true basics, like embellishing t-shirts, while bringing in boring higher-priced items like a lackluster leather jacket. They need to go high or go low. Or do both. People still need their white t-shirt and want their fun ball gown skirt. Why not steal a trend from 1996 and sell them together?