Reviving Gap Inc.’s four big brands is a heavy lift for sure, but progress is being seen.
“Each brand is in a different stage of reinvigoration, but all of them are really starting to show up on the scoreboards,” Richard Dickson, Gap Inc.‘s chief executive officer, said during his conversation with WWD’s executive editor Booth Moore during the WWD Apparel and Retail CEO Summit.
The CEO covered a wide range of topics, from the four top corporate priorities and speed to market with new products to designer Zac Posen’s role at Old Navy and Gap Inc. and testing new store concepts.
First, Dickson recapped recovery efforts at the four Gap Inc. brands — Old Navy, Gap, Banana Republic and Athleta. Gap Inc. generated $14.9 billion in sales in 2023, with comparable sales down 2 percent.
“We’ve spent a lot of effort over the last year really identifying the differences of each brand and the differences with the context of the consumer relationship and how these brands present themselves.” At one time, “there was a little bit of challenge with differentiation” between the brands.
Dickson characterized Old Navy as the mothership, being the largest brand in the portfolio, and saying, “It’s really about reasserting Old Navy” as the style authority from a value perspective. “It’s always been about fun and family and values and how that expresses itself through digital dialogue, store experience, and certainly the product we present. And, of course, the experience that you get with our staff is a really big part of what we call reassertion. We’re excited about the work we’ve done thus far.”
Gap brand, Dickson said, “has been on a mission to really reignite, and we’ve done that through music and fashion and content, really taking what we call ‘big ideas’ and amplifying them through all the various touch points where our consumer is and engages, and we’ve had some really good momentum that hopefully is making you smile . . . . We believe that we’re just really getting started with that process.
“Gap is a pop culture brand. It’s part of the American fashion and retail legacy,” Dickson said. “There’s a lot of content leveraging entertainment platforms and entertainers who we’ve been able to incorporate into our narrative.”
“Gap is a pop culture brand. It’s part of the American fashion and retail legacy. There’s a lot of content leveraging entertainment platforms and entertainers who we’ve been able to incorporate into our narrative.”
— Richard Dickson
Banana Republic is about “Re-establishing itself as the authority that we believe we have in the premium lifestyle space — extraordinary fabrics, great details, leather, suedes and textures differentiated within our own portfolio, but that provide really great value, and those must-have items that last for generations,” Dickson said. He encouraged the crowd to visit some recently opened new Banana Republic concept stores in New York.
Dickson said that Athleta, Gap Inc.’s performance apparel brand, represents “an extraordinary opportunity” for growth. He said Athleta has a strong foundation in purpose with its “Power of She” campaign celebrating women and female empowerment. “We take a lot of pride in the fact it is a women’s- and girls-only brand, but we’ve been spending a lot of time over the last year resetting Athleta. If you’ve been in our stores and seen our marketing, you can see there’s great excitement, new product, and new ways of expressing the brand visually. We have Katie Ledecky, of course, and Simone Biles,” two Olympic gold medal winners who participate in the Athleta’s Power of She movement, among others with performance excellence and celebrity status to “personify the brand.”
Dickson spelled out the four top priorities for the company setting the roadmap toward “our transformational progress.”
Priority one is striving for “financial and operational rigor, which is more about the disciplines we needed to put in place to run a better, more impactful business, whether that’s inventory forecasting, stock and sales relationships, and various ways to take bets on trends, but risk-mitigate these.” To some extent, he added, those represent “the price of entry for well-run businesses.”
He said the company is starting to feel “much more confident,” becoming more disciplined, which enables the company to advance its second priority. “If you get the operational financial disciplines right, it allows you the freedom and the finances with credibility to start reinvigorating brands. With reinvigoration comes exciting new product and new marketing and different various ways that we can express the brand to drive relevance and revenue.”
The third priority he cited involves strengthening Gap Inc.’s platform, including technology, HR, legal, the global supply chain, and all the support systems for the brands in the portfolio.
“Last but certainly not least and high on my priority list is strengthening our culture,” Dickson said. “A strong culture is one where people are united in goals and measures and objectives that ultimately inspire them.
“So we’ve been working hard on those four priorities that integrate with each other. But it all starts with financial, operational rigor. That’s the runway to all that good stuff.”
Dickson characterized Gap collaborations as a format to drive relevance and sometimes revenue as well. He said the recent linkup with Cult Gaia on a women’s and kids’ holiday collection performed “exceptionally well,” and that the one with Mad Happy proved to be “a gateway to a new consumer . . . . In other cases, collaborations reintroduce Gap brand to an audience that loved us but may not have [lately] considered us. So these are well considered partnerships that have a very clear objective to drive relevance and revenue, and there’s a lot more exciting collaborations coming up.”
Regarding Zac Posen, Gap Inc.’s executive creative director and chief creative officer for Old Navy, he’s “a force of creative energy across our company,” Dickson said. “There are specific design tasks that he has had. But overall, I would say, Zac has [brought] a lot of creative spirit to the company. And I would say, in the context of our future, he will attract new and interesting, creative personas to the company.”
On the possibility of recruiting other designers for other brands in the portfolio, “I wouldn’t rule that out,” Dickson said.
He explained that the process of design, developing and marketing new products generally has a nine-to-12 month timeline. “We always want to be faster. We’re working on various technologies that bring to market our product faster, but in a way that’s very disciplined. We are not fast fashion. We pride ourselves on quality, enduring styles, and iconic essentials that last. Certainly we want to be on trend, but not necessarily trend deep . . . I will admit that faster is an important objective, but getting it right is probably even more important.”
Regarding digital advancements with Gap Inc. brands, Dickson said, “I’m really proud of the team’s work and the expression that we’ve had in our online presence.”
The persona of each brand is being projected more effectively, he said. “We then translate that into our store experience. We love all our stores and all our people, but it is difficult to switch the light on, if you will, and renovate and refresh or remodel as many stores as we have, so we’ve taken a careful strategic approach to that. Obviously, it takes a lot of capital, but most importantly, it takes the right creative. You have to have the right creativity applied for the consumer experience, the sights, the sounds, the aesthetic, the brand language, the merchandising, the product, the staff — everything counts. And so we have some tests going on right now, some probably more obvious, where we are learning quickly what works, what doesn’t work.
“Athleta, for instance, has a really good new concept that we’re starting to accelerate,” Dickson said. “Banana Republic has a few tests, particularly around the city [New York] and other spots in the country, and the Gap brand will have some exciting new formats. Old Navy, which is a very big and complex brand, also has some tests in merchandising and different ways that we can design a better consumer experience. So we’re on it.”
Describing the nature of his job and his way of working, the CEO said, “It’s not a job where you can lead from behind a desk. We have thousands of stores and DCs and partners, and it’s really important to me to feel like I have an ear to the ground…The better that we can get on the ground with our people dealing with the details that really matter to our consumers, the more that it will matter to them, and the more it will matter to us. Culture eats strategy for breakfast. It’s a famous phrase Peter Drucker said. I borrow it.”
Dickson joined Gap Inc. as CEO in August 2023 after serving as president and chief operating officer at Mattel, where he was instrumental in helping to revive Barbie and in the movie “Barbie.” “I didn’t just walk into a place. I walked into a culture.
“We ask ourselves all day long, ‘what if? And why not?’ And having that in our toolbox, from a cultural perspective, fuels resiliency, because we now have a culture of transparency that could acknowledge the problems. And when you have a company with legacy like ours, part of the problem was we didn’t acknowledge the problems as much as we needed to. So now we work out loud, and that, by itself, creates inspiration.”
