Gap, Inc. Changes
Gap, Inc. announced a split last week that for many in the retail world, was a long time coming. Old Navy will peel off to become its own company, while Gap, Banana Republic, Athleta, etc. will stick around as a new company, navigating their way together. This is an interesting decision, as Old Navy is the real powerhouse of the crew, estimated to make up a majority of Gap, Inc.’s profitability. So what are we left with here?
Old Navy as its own gig is a curious choice because there seems to be more product and brand alignment up the stack of Old Navy, Gap, and Banana Republic. For example, you could get a pair of black trousers for work at any of these three, with the quality and cuts improving along the way…….sort of. Therein lies the dilemma for the new “NewCo”, or , gaggle of brands without Old Navy. Banana and Gap overlap each other in offerings and demographic in a bit of a strange way. Basics abound at both, but neither have really been able to sharpen their personalities and offering in order to either capture a distinct shopper or offer different vibes to the same. Everyone has high hopes for Old Navy, which will likely be just fine churning out uber reasonable wardrobe basics and equally reasonable prices. What do we do with the rest?
1 | Redefine Falling into the Gap
Gap, dang it I’m rooting for you. We were all rooting for you! That said, Gap needs to move swiftly to re-define its offering. They have a naturally more casual vibe than Banana, and could capitalize on that by simply doing it better and aggressively cutting down their product offering. A bit of a “fewer, better” in this price and quality range. Their basics are slouchier, a bit edgier, and sometimes the shapes joyfully read a little more fashion than what you can find at Old Navy. Hang on to this.
On the flip side, management is going to have to come to terms with losing the “Gap” logo on every possible iteration of hoodie. Unless there is some major awakening around the curvy block text of the 1990’s, this has played out and only serves to cheapen what’s left. Cut it from everything. No one is seeking the Gap label as a marker of quality or style or even a passing reference to the lost interest around normcore fashion. Just make me a perfect grey hoodie. Make no distinction between perfect grey hoodies. Yes of course I want the “super soft” one - why are you making a hoodie that isn’t super soft?!
Brand Gap around the idea that these clothes do just that—fill in the gaps in your life and the other brands in the line up. Athleta’s workout gear is far superior at similar price points. Gap doesn’t need to offer such an extensive selection of activewear. Banana’s workwear is sharper (but more on that in a minute…) I don’t need quite so many blazer options. Old Navy’s basics are cheaper, so give them an edge or cut them. Redefining this narrative will be critical if Gap is to actually find its place.
2 | Beef Up Banana Republic
Banana Republic has been a total snooze fest since Marissa left. At the time, their smarter, edgier take on workwear was the lone advantage they had over places like Ann Taylor. Now, shapes are deeply unflattering without being modern, florals are cheap looking, and for the love of God could you please be sure every store has a few steamers on hand? More than often, a stroll through Banana Republic could convince you you’re in a Times Square H&M (bless) based on the tumble of wrinkled piles you work through to find a sweater.
Banana, if you’re going to make it, clean up your brick and mortar act. It is a valuable advantage if you’re going to hang on to this space to have better designed shopping experiences in person that truly help the early career woman sort her wardrobe. A fresh take on store layout would help. Stop organizing by collections, petites, etc. and instead walk a woman through her work week. Sharp suits on Monday, all sizes, happen together in this part of the store. Tuesday blouses and skirts are over here, and so on and so forth until you land on blazers and sharp jeans for a more casual Friday. Using the mix of their pieces to tell a story that supports the women building wardrobes at this price point would go a long way and also clear some room for Gap to stand back up as the “in between” catering to weekend, a bit more casual vibe, and lounge.
3 | Athleta, Flex Those Brand Muscles
Athleta has something special. They’ve managed to bypass the bouginess of $80 leggings and build a narrative focused on female empowerment and wellness. It is inclusive in a way that we all know the Lululemon’s of the world are not. Their “Power of She” messaging and nods athletes like this incredible woman, give the brand a vibe that is both well-intentioned and modern.
Athleta might find new avenues to continue to grow by thinking through smart co-branding, and other wellness partnerships that let it shine. They could also do a bit better messaging around their in store wellness events. (Does anyone really understand how “in store” yoga classes work in a retail space?) Instead, take the opportunity in major markets to partner with known studios and continue to host events and activities. Think bigger about who is an athlete. Outfit e-sports players with comfy wears, showcase more moms with strollers, co-brand sweatshirts at a girls’ coding competition. That’s growing the power of she.