Moneybox Browses the Gap

Moneybox Browses the Gap

Moneybox Browses the Gap

Moneybox
Commentary about business and finance.
Sept. 7 2000 3:08 PM

Moneybox Browses the Gap

The Gap has had a bad year. Actually, a lot of retailers are having a bad year, but with the Gap it's curious because the company seemed so unassailably red hot not very long ago. Even when the flagship Gap stores began to stumble a bit, it was OK because the other key territories in the Gap-pire, Banana Republic and Old Navy, were going great guns. Lately, however, nothing seems to be working. Just before the Labor Day weekend, the Gap announced that same-store sales had fallen 14 percent in August--the percentage drop at Old Navy was particularly steep, in the mid-20 range. The company's once-sizzling stock is now trading at around $23 a share, near a 52-week low, and way off its highs in the low 50s.

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With this in mind, I set out yesterday for Lakeside Mall in Metarie, La., not far from where I live in New Orleans. Lakeside is a clean, relatively spacious mall with a thoroughly middle-American clientele; it happens to contain a Gap, a Banana Republic, and an Old Navy.

I started at the Gap. It's been a long time since I've actually purchased anything at a Gap store, but I understood why it took off in the 1990s: Its real strength was in cranking out basics. Jeans, T-shirts, casual button-ups, khakis, socks, each item offering up a studied lack of flash. As a memorable August 1998 Fortune cover story put it, the Gap's explicit strategy was to avoid the usual gambit of trying to infuse its fashions with upward-striving symbolism; instead its look was "democratic and familiar." The offerings were generic yet tasteful. As the American workplace got more casual, you still couldn't very well walk around in an actual Hanes T-shirt, could you? Of course not! Thus, you turned to the Gap, which offered very similar T-shirts in a wide variety of inoffensive colors that were of somewhat greater quality at an unquestionably greater price. It was essentially a middlebrow fashion chain posing as a middlebrow discounter. Or maybe the other way around.

Anyway, the overwhelming impression I got when walking into the Gap yesterday was: Nothing has changed. From the store's design to the piles of inoffensive garments in neutral colors, it's the democratic-and-familiar thing, which now seems played out. I quickly got bored and left.

Banana Republic hit its stride around 1997; its stores aped the look and feel of a boutique, and its shelves were stocked with items that pushed the Gap formula more upscale and more professional. It became a middlebrow boutique, I guess you could say, and for a while this was really effective. I went through a period about two years ago when I was an unabashed fan of the place (and frankly, I don't regret it: I have one rain jacket from Banana Republic that still gets unsolicited compliments). Anyway, the striking thing about visiting this particular Banana Republic after this particular Gap outlet was how similar they seemed. The colors were similar, many of the items seemed the same, the hardwood floor in the Banana Republic had a slightly darker stain, but otherwise the two places felt like different rooms of the same store. It suddenly occurred to me that I couldn't remember whether the imperative "Everybody in Khakis" was an ad slogan for the Gap or Banana Republic.

I moved on to Old Navy, which did at least feel different. The new chain began in 1994 and started to feel ubiquitous about two years ago. As you probably know, the floors are concrete and the high ceilings intentionally expose pipe work, so the look suggests a discounter like Costco or Sam's Club. I find it somewhat surprising that Old Navy has suffered the worst same-store declines, because on this visit I found the store--which in the past I had never particularly cared for--easily the most appealing. There was more energy, there were more actual customers walking around carrying things that they seemed prepared to buy, and the background music was better. (They've also somewhat backed off on the pseudo-kitsch offensive that struck such a wrong note for me the first time I visited an Old Navy.) Finally, while the chain's marketing winkingly suggests that there's something fashionably "techno" about some of its offerings, there seemed to be a better selection than I remember of the kind of clothing staples that were the key to the Gap's democratic anti-fashion--for instance, some reasonable-looking V-neck sweaters were only $20.

You can only learn so much by walking around a couple of stores, of course. Old Navy's disappointing August was reportedly at least partly attributable to supply-chain problems. And as a company, the Gap has been down and has made a roaring comeback before. Still, to visit the three stores in one afternoon is to wonder whether the Gap isn't facing two problems. The first is that Old Navy and Banana Republic, by chipping away at the two extreme ends of the flagship Gap's identity, don't seem to have left very much room in the middle for that identity to occupy. (This seems particularly troublesome when all three are in one mall, which is not exactly a rarity.) The second point: The Gap's 1990s comeback was based in large measure on the notion of treating clothes like any other brand-driven, interchangeable consumer product. But maybe, after a while, even anti-fashion goes out of style.