I can picture the meeting:
Gap Fashion Executive: Guys, guys! You're not going to believe this. I have been to the mountain and I have seen our company's savior!!!!
Marketing Executive: Wow! What is it?!
Fashion Executive: A white t-shirt!
Dumb as that may sound the Gap (NYSE: GPS) apparently believes white t-shirts and a spot on the cover of the May issue of vogue are what it needs to revive a brand that has been in the toilet for a long time. The white shirts in the picture are Gap and the rest of the clothing is from designers like Carolina Herrera, Isaac Mizrahi, Giorgio Armani, and Oscar de la Renta.
Gap has shown some strength of late, with Gap North American stores reporting a 4% increase versus a 13% decline last year, but the company's other brands, Banana Republic and Old Navy, showed much stronger increases.
But will it continue? MarketWatch's Mark Lichtenfield states the obvious, and I agree with him: "...A funky white T-shirt is not going to be enough to fix the company." Industry analysts agree that the company has much deeper problems: The clothing doesn't have a fresh, exciting look, and there's no clear demographic: Who exactly is the typical Gap shopper? In the company's heyday it was someone young and hip, but now? They're over at stores like Abercrombie (NYSE: ANF).
Jim Cramer previously predicted that The Gap would go private. And maybe it should. While the company's solid cash flow might be appetizing to a private investor, there's certainly no growth story here to get investors all excited about.
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Reader Comments (Page 1 of 1)
5-02-2007 @ 7:21PM
Donald Scott said...
Don't forget to put a pocket on it. Clothing makers, i.e. T shirts, are missing a whole new consumer out there. I don't buy T-shirts without a pocket on them.
5-02-2007 @ 8:38PM
TCB E said...
The Gap needs a union not a t-shirt. I feel that it is very upsetting to the family and freinds of people who work at the Gap to watch their benefits get cut and then they hire high price models?
Most people don't realize their wearhouses get over 100*f in the summer. It is real bad if your up in the cherry picker and you about have a heat stroke. Their comment is we gave you salt pills. And don't ask for extra break time because of heat illness. This is a no no. Going to the bathroom is a no no too. Gap employees I guess only go at home?
5-02-2007 @ 8:38PM
Jane Doe said...
Gap needs a union not a t-shirt they just added 350 cases per person to pick for an 8 hour shift.
Gap is sounding more like an auto industry. I guess they want the employees (temporay employees also) to die of heart attacks so they won't have to pay retirement. Wearhouses have little or no airconditioning. You get up on a cherrypicker next to the ceiling(100*f)to pull a pick and if you ask for extra time for your break it's no we can't allow that.
Each year they cut back more and more benefits. Where are they getting this money to pay for these high price models?
5-03-2007 @ 7:56PM
Former Gapper said...
Well, I used to work at Old Navy and have nothing but good things to say about the company. I was treated very well...earning as much per hr as a part time t-shirt folder as I did as a full time employee for another conglomocorp. I wish the company well. They were an icon of the 80's and, hopefully, they can regain their footing and become the hot clothing store for the fashionable again...