Gap, Inc. is a leading American specialty apparel retailer based in San Francisco, California. It sells casual apparels, accessories, and other personal care products for men, women, and children. The products of Gap, Inc. include denim, khakis, T-shirts, boxers, and casual wear. It is traded in New York Stock Exchange under the symbol GPS. Currently, the company boasts approximately 150,000 employees and 3,139 stores all around the world. Gap, Inc. sustains a large number of brands, namely Gap, Old Navy, Banana Republic, Forth & Towne, Piperlime, and others. These different companies were bought by the parent company at different times. What started as a general jeans retailing store, Gap, Inc. in 2008 had a market revenue of $14.5 billion. Throughout its history, Gap, Inc. has established itself as a leader in the industry.
In 1969 the first Gap store was opened in San Francisco, CA by Don and Doris Fisher. Fisher’s initial goal was to open a store that would sell records and jeans, but no one seemed to notice the jeans so the store was getting very close to bankruptcy. That is when he decided to put ads in local newspapers to draw more attention to his new store. The low prices in his advertisements brought in customers, and soon the clothes were sold out. Fisher then decided to name his new store The Gap, implying that the merchandise was geared toward the age group in the “Generation Gap.” The store’s combination of jeans, low prices, and a wide selection brought in a customer crowd between the ages of 14 and 25. As this group got older, their styles and tastes changed. They no longer wanted Levi’s, which caused The Gap to expand its selection of clothing. It started carrying shirts, sweaters, and accessories as well.
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In 1975 Gap stores generated $100 million in net sales. By 1976 the company offered 1.2 million shares in the stock market, going for $18 per share. Shortly after, however, the retail industry went into a steep downhill slide, pushing the new stock down to $7.25 a share by the end of the fiscal year. When 1980 came around, the Gap had managed to come back and push sales up to $307 million. Ten years later, at the end of 1990, The Gap had 1,092 stores pulling in $1.9 billion in gross earnings. By 1994, Gap, Inc had 210 Banana Republic, 902 Gap, 437 Gap Kids, and 131 Old Navy stores bringing in nearly $4.4 billion in gross earnings. In 1995 Gap had expanded to international stores and now had 91 stores in Canada, 55 in the United Kingdom, 12 in France, 4 in Japan, and 2 in Germany. Between 1984 and 1999 Gap, Inc grew by 24,000% according to the National Post. However, disaster struck in 2001 when the company posted a $7.7 million loss. The company was losing market share and having trouble appealing to the younger crowd.
Old Navy Inc., a subsidiary of The Gap, has about 1,065 stores that can be found all over the United States and Canada. Old Navy’s marketing purpose is to produce affordable, fashionable clothing and accessories for adults, children, babies, and moms-to-be. Old Navy’s objective, according to Gap, Inc., is to “offer great fashion at great prices for, everyone” (www.gapinc.com).
Old Navy accounts for approximately 40% of The Gap, Inc.’s $14.5 billion in sales, proving to be a very important part of The Gap’s market. These numbers put a lot of pressure on the company’s president, Jenny Ming. In order the keep these impressive statistics up, Ming wanted to expand Old Navy by using her “skills” of predicting fashion trends and filling Old Navy stores with the latest styles.
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The Gap Inc. When I first thought bout what company I would like to research, I look down and fixed the collar on my shirt. Then it dawned on me that since I love fashion, I could do it on the gap. Who had the power (and the clothes) to make the NYSE take its first casual Friday The Gap - the ubiquitous clothing retailer that runs over 3, 300 stores, mostly in the US, but also in Canada, France, ...
Old Navy stumbled for the first meaningful time in 2000, and the timing could not have been worse for The Gap. By October 2000, the company had posted five months of consecutive sales declines, while its stock value went down 57%. In 2001, two years after the company had set its record high or $1.1 billion in net income, they were forced to claim a $7.7 million loss. Old Navy was no longer able to help The Gap by saving them with astonishing sale numbers. The Gap’s plans for international expansion were put off by their all of a sudden downhill slide in the market.
Although Old Navy was unable to continue their expansion in the years immediately before their tenth anniversary, they still represented a powerful retailing force. This did not stop them form going into their second decade with much enthusiasm and promise to be The Gap’s leading sales branch for bargain hunters in the years to come.
The Gap, Inc and Old Navy both gear most of their advertising and products toward families; a mom, a dad, and the children. At our age, we’re kind of between the family stages. We are not the children anymore, but most of us aren’t mom and dad yet either. Therefore, these stores are not as appealing to us as stores such as Abercrombie and Fitch, Forever 21, Zumies, and Macy’s. If the Gap and Old Navy want to appeal more to the age group of 18-25, then they need to make some changes in four general areas; product, advertisement, visual appearance, and affordability. We developed some ideas for these changes by brainstorming together and also surveying other people our age.
When we asked what could be changed in these stores to attract more people our age, people had a lot to say about the product. A lot of people said that they feel like the Gap needs a larger variety of clothes with a more modern style. The clothes are “too preppy” according to many people that we talked to. They want brighter colors and a more trendy design. One volleyball player also stated that they need longer pants for girls.
Another very popular topic had to do with advertising. People in our generation feel that it is a good idea to get rid of the “supermodelquins” and get real people in their commercials. Many people said they would much rather see a celebrity in a commercial or ad than a mannequin. The stores also need to advertise in magazines that are geared more toward our age group, such as Sports Illustrated or Cosmopolitan.
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The visual appearance and atmosphere of the store was also quite important when people gave their input. They suggested that the displays be changed in the front windows to more trendy clothes. People also wanted to see paint on the windows advertising new products or sales. Music was an issue that came up a lot. People want “cooler,” more modern music to shop to. They stated that the music played in the Gap and Old Navy was “too preppy.”
The last and perhaps the most popular category was affordability. A few people said if the stores gave you free stuff, they would shop there more. A good deal would be if you buy over a certain value of merchandise, you get a free bag or shirt. People were very enthusiastic about sales. They said if the Gap had a really good sale they would definitely go check it out. Nick also came up with a very good idea of student discounts or specials. For example, if you bring in your student I.D. card you get 10% off of your purchase. Anything that saves you money is going to draw in customers.
We got a lot of great ideas from a variety of different people. We figured who would know what attracts our age group better than themselves? So we asked some friends, posted the questions on Facebook, and asked people coming and going from the DC what their opinions were. A lot of times we got some of the same answers, but we got a few creative answers too. We cut out some of the not so practical ideas (for example one guy said “If there was a batting cage in Old Navy I would definitely go.”) and we kept the ideas that we felt were the best.
Source:
International Directory of Company Histories, Vol. 55. St. James Press (2003).
The Gap, Inc, -company history.
Retrieved November 20, 2009, from FINDINGUNIVERSE website: http://www.fundinguniverse.com/company-histories/The-Gap-Inc-Company-History.html
