Photos: Gap Inc.
Last week on an analyst call, Gap Inc.’s new CEO Richard Dickson said all four of the company’s brands — Old Navy, Gap, Banana Republic, and Athleta — have “incredible heritage” but need to have a “clear point of view” communicated through “innovative marketing to regain a powerful ongoing voice in the cultural conversation.”
Dickson was the former president and COO of Mattel, as well as a Gap board member since November 2022.
Old Navy’s heritage is “rooted in fun, fashion and value,” but the banner has to be more consistent in delivering “bold and breakthrough narratives,” according to Dickson. He also believes product assortments need to be enhanced, “balancing essentials with exciting new trends and a pricing strategy that clearly communicates jaw-dropping value, all of this to remind customers why they love Old Navy and give them compelling reasons to love us even more.”
The flagship Gap banner “has been far too quiet in the cultural conversation,” Dickson noted, given its over 50-year heritage. He explained that the company needs to “reignite that dialogue” by providing confident and trendy assortments that are priced well and include culturally relevant messaging.
Banana Republic is finding some success with cashmere and leather offerings but needs to further refine its product, pricing, and marketing approaches to transition from its prior “promotional and transactional” stance. Dickson said, “We think Banana Republic has an opportunity to thrive in the quiet luxury space and represents a unique position in our portfolio.”
Athleta likewise has “gotten off track” with lackluster performance. This may in part be due to product misfires, poor marketing choices, and unsuccessful retail execution that didn’t resonate with customers. The brand is now refocusing on its performance roots. On the call, Dickson explained, “While we are progressing each quarter, we know that a full brand reset will require a more comprehensive approach and will take more time.”
Gap’s shares surged more than 30% on Friday after the company’s third-quarter results topped expectations amid signs of improvement at Old Navy and the Gap banner, although cautious guidance was provided for the holiday quarter. Shares have nearly doubled since the July hiring of Dickson, who was credited with reviving the Barbie franchise during his time at Mattel.
In the Q&A session during the analyst call, Dickson underscored that all four of Gap’s brands need a much stronger point of view and fine-tuned storytelling approaches to increase their relevance. Additionally, according to Women’s Wear Daily, he said in a recent interview, “We’re telling too many stories. We need to edit ourselves to tell a more clear and precise story that stays consistent and has a relentless, repetitive narrative to it.”