Word: fashionization
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...retail world's bright lights gathered Jan. 15 at investment bank Financo's annual dinner in New York City (a can't -miss annual event for the apparel crowd), the gossips, according to Fortune.com, had one juicy no-show to chatter about: Where was Gap CEO Paul Pressler? Fashion insiders had been numbering Pressler's days for months. And sure enough, after nearly two years of limping sales and yet another holiday season in which the Gap's big idea (more hoodies?) drew yawns from shoppers, Pressler agreed a few days later to step down...
...departure--"a mutual agreement between him and the board," according to a Gap spokesperson--marks a low point in the history of a brand that not so long ago epitomized smart, affordable fashion. Named for "the gap in the market it hoped to fill," the Gap had something for everyone. You got your khakis there; your grandmother got her cardigans; Sharon Stone got her outfit for the Oscars. So what went wrong...
...stores--that the only way for Gap to keep growing was to push clothes with broad appeal that could sell millions and millions of units. But once everyone had bought a pair of khakis, a white button-down and a few pocket Ts, what next? Pressler, a novice to fashion who came to Gap after a 15-year career at Disney, took his time figuring that out. Meanwhile, competitors surged ahead, as Gap's sales fell 2%, to $14.8 billion last year. "It used to be that the Gap dictated fashion, but now customers have so many resources, they dictate...
Those consumers have been gorging themselves at the so-called fast-fashion boutiques, such as H&M, Zara and Mexx. These stores have figured out how to cut the clothing cycle down from six months to six weeks, so their racks are constantly replenished with fresh styles still wet from the runway. Gap, on the other hand, with its huge operations and slower reaction times, has been forced into the riskier business of guessing up front how a season's trends will play out (skinny jeans? newsboy caps?) and making huge bets on a few ideas...
...into three more-nimble parts, with each brand focused on a specific customer demographic. "The combination is overly complex and unmanageable," says Todd Slater, managing director at Lazard Capital Markets. Whether or not it remains one intact company, industry experts say Gap will have to get back to the fashion basics at its flagship or risk losing even its undisputed title as the king of khaki...