5.07.2007

Blogging the Gap: Everybody in khaki

Think about the Gap. What do you buy there? Who shops there?

For me, Gap has always been about the basics, a reputation solidified by their advertising campaigns. Everybody in vests ...dress you up in my love... everybody in khakis ...they call me mellow yellow...

Part of its current identity crisis is that people have gone elsewhere for their basics. Why buy a white t-shirt at Gap for $15 when it's 2-for-$12 at Old Navy? Why buy a black t-shirt at Gap when the J. Crew version is $5 more, but won't fade as fast?

More than anything, Old Navy has cannibalized Gap, because when it comes to basics, why spend $50 when the $30 will work just as well?

It's always surprised me to meet people who didn't shop at Gap. Where do you buy your white t-shirts, I always wondered, but the thing is, since Gap opened in 1969, there have been plenty of stores to open and do a version of what Gap does, but a little better, a little quirkier, a little cheaper. Each one of those stores at a bit of Gap's customer base and grew its own. Express, Abercrombie & Fitch, American Eagle, Aeropostale, J.Crew.

The question now, is how to find its own unique niche within a crowded retail market. Old Navy also needs to do this, but Old Navy's destiny is inextricably linked with Gaps. Interestingly, Banana Republic has become the tentpole for Gap Inc. Its profits and earnings have kept the company afloat and, in discussions of taking the company private or selling to an investor, its always mentioned as a spin-off to keep public...and profitable.

It seems that Gap -- and Old Navy -- have seen their future in appealing to the crowd that loves the designer knock-offs at H&M and Forever 21 and celebrity/designer diffusion lines at Top Shop and Target. The young, broke fashionista. But is that market already too crowded? And do those fashionistas even remember the Gap as anything other than a place they bought boy cut jeans in 8th grade?

Another topic for another post.

Stockwatch: GPS down .13, to 18.37.

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