|Source: Fibre2Fashion.com |
Suzanne Kapner has written a great article about The Gap in the Wall Street Journal this week.
She describes in great detail the formidable challenge facing new CEO Sonia Syngal. The long-running troubles at The Gap are summarized most eloquently by Ivan Wicksteed, former chief marketing officer at Old Navy (one of the retail chains operated by The Gap Inc.). The article quotes him directly:
The brand “hasn’t articulated what they stand for,” said Ivan Wicksteed, a former chief marketing officer at Old Navy who left in 2015 and now works for a health-care-technology company. “If you try to be everything to everyone, you end up being nothing.
Kapner describes the roller coaster ride at The Gap over the past decade, as the firm's struggles have mounted:
Over the past decade, the Gap brand has careened from one look to another. One year, according to former executives, it wooed younger, budget-minded consumers by competing with fast-fashion chains. The next, it went after higher-income shoppers by selling $600 leather jackets.
The company operates major retail chains: Gap, Banana Republic, Old Navy, and Athleta. Interestingly, the Gap stores themselves are the weak link at the company. In large part, that's because the Gap brand has the most muddled competitive positioning. Old Navy has a solid low cost positioning. Banana Republic competed with a differentiated, premium price strategy targeting a very different set of customers than Old Navy. The Gap, however, remained stuck in the middle. It didn't have the low costs of many major rivals, including its own Old Navy brand, nor the cache to command higher prices.
Moreover, the Gap wavered over the years between a "selling the basics" strategy more akin to Uniqlo and a "fast fashion" strategy pioneered and mastered by firms such as Zara. The two strategies require completely different business models: different supply chains, different management control systems, different store operating models, different types of people in key positions. Zara's entire business model is tailored toward fast fashion. In other words, its vertical integration strategy is not well-suited to delivering low prices on basics. It is, however, very well-positioned to offer trendy fashion in a way that minimizes the downside of "fashion misses" and curtails the need for hefty markdowns.
In sum, Syngal will have to decide who she wants The Gap to be, and then build an entire business model tailored to deliver that value proposition. It will mean making tough tradeoffs and targeting a particular set of customers, rather than trying to be all things to all people.