A Case for Euthanasia? Gap on Life Support
In 2011, I opened with this salvo: \”I don\’t care how much cash The Gap is sitting on or how much they generate on a daily basis. Just as Sears keeps pumping blood (cash), through its veins, Gap is, and has been for a long time, staying alive on \”life support.\” Essentially, the body (the retail business) is dying, but the nearest and dearest relatives (shareholders and the Board) obviously do not want to pull the proverbial plug. They all stand around the dying patient, hoping for some kind of miracle recovery, (metaphorically speaking, but bear with me).\” This is a chronicle of a death foretold.
[callout]Because Pepsi was a powerful brand, it could recover from a flopped apparel launch. Gap and its brands have invested billions over the years, doing the same thing. Unfortunately, they are no longer powerful apparel brands, so they will not be able to go back when their logo fails on a baby crib.[/callout]
There is No Gap Déjà Vu
In 2015, I wrote, \”More like a slow, Sears-like descent to the bottom? Glenn Murphy exits. Art Peck takes over. It matters not who the players are because there has been a revolving door full of them for the past 15 years, all declaring how they would return Gap to its once dominant position as the cool apparel brand for America\’s youth. All of them failed to do so, and there is no reason to believe Art Peck will have any better luck. Actually, even luck would not be enough to reverse the ultimate fate of this storied brand.\”
Art Peck\’s \”Hail Mary\” Won\’t Save The Dying Gap
In 2019 I wrote, \”Paul Pressler (CEO, Gap – 2002-2007), passed his failing patient (Gap), over to CEO Glenn Murphy who was the unsuccessful surgeon who operated on Gap while it was on life support, between 2007 and 2015. Murphy was unable to bring the patient into recovery mode. So, in 2015 he passed it along to its current CEO and undertaker, Art Peck, who seems to be putting the final nail in Gap\’s coffin as he presides over its impending death. Ever since Murphy passed the dying body over to Peck, it has continued to flatline with actual sales declines in both the Gap brand and Banana Republic. The only hint of a heartbeat has been Old Navy.\”
History Loop: Out Again, In Again — Bob Fisher Redux
So, Peck failing to make Gap cool again, ends up in the revolving door and leaves in November of 2019. Replacing him was Bob Fisher, member of the Fisher family who founded The Gap. This was the second time he stepped back into the Chairman or CEO role on an interim basis while they searched for yet another CEO. The first time he re-inserted himself was in 2007, following the ouster of Paul Pressler. Maybe that time around, he intended to be at the helm of the Titanic when it sank, or maybe he thought he could turn it all around. Today? Good luck in this nuked out, hollowed out, Covid-19 world war.
No Time Outs Left – Fisher\’s Final Hail Mary
Well, I think I\’ve got the answer. WWD reported on May 1, Gap Inc. is reverting back to that old, but, highly touted at the time, 1970s \”brand extension\” marketing strategy. So, as there are no timeouts left for the Gap, Banana Republic and Janie and Jack, Fisher\’s Hail Mary pass is to sign a multiyear contract with giant international IMG, to license its brands to categories including bedding, home textiles, home decor, furniture and baby equipment such as strollers and high chairs, and presumably others.
Note: a brand extension strategy works only if:
- The brand is strong.
- The extended category is compatible with the core brand\’s DNA.
Pepsi-Cola had a powerful brand when it licensed the VF Corporation to create Pepsi apparel in the 1980s. It flopped big time. Gap\’s brands are anything but powerful, indeed they are on life support. And, do you think any new young consumers — comprising the now biggest cohort Gen Z/millennials — will be interested in buying a Gap brand crib?
Just like Pepsi and many other brand failures venturing into non-compatible categories, however strong or even weak, they forgot the consumer. Like Pepsi, and now Gap, they\’ve spent billions of marketing dollars over decades, hammering into consumers\’ minds that Pepsi is a great soda brand. So, when they read or hear the word Pepsi, their mind envisions the soda can or bottle with the logo. When they see or hear the brand on apparel, it does not compute, and never will. However, because it was a powerful brand, it could recover from a flopped apparel launch. Gap and its brands have invested billions over the years, doing the same thing. Unfortunately, they are no longer powerful apparel brands, so they will not be able to go back when their logo fails on a baby crib.
Good luck Mr. Fisher. I believe this will be your final \”Hail Mary\” which also will never be caught in the end zone.