Gap is in a rebirth thanks to various strategies such as its collaboration with Kanye West, its push on TikTok and the support of Simone Biles, showing that brands can have a second, third or more airs.
The change in trends also has a name within the Gap, CEO Sonia Syngal.
Gap’s success
Last Friday, Gap shares rose 3 percent after the retailer reported earnings and sales for its most recent quarter, beating forecasts and issuing an optimistic outlook for the remainder of this fiscal year. So far, the shares have soared 35 percent in 2021.
Syngal, the former head of Gap’s Old Navy unit, took control of the entire company in March 2020. By then, Gap was in a bad but not yet critical situation. It ended up abandoning plans to spin off Old Navy, while the Banana Republic was struggling and Gap needed a major makeover.
However, when the coronavirus pandemic appeared, the brand faced a cash crisis due to store closures.
That’s when Kanye West comes in. The rapper announced a 10-year partnership with the brand for a new line in collaboration with Yeezy in June 2020, but a month later threatened to abandon it.
By fall, the first piece in this collection, a $ 200 jacket, began shipping to some customers. Pre-orders started in North America, Tokyo, and Europe.
According to the company, the lawsuit was serial. According to CNBC, in the middle of a conference call with analysts on Thursday night, Syngal said that “he has had a great response. We have had a much younger client. We’ve had 75 percent of those customers being new to the Gap brand. And so we are excited to be out of the gate. “
Not everything is Kanye
While collaboration was key to doing so, Syngal said Gap benefited from strong demand for all of its apparel as consumers “embraced summer with optimism.
“We saw a celebration of American style, of ’90s nostalgia and the revival of denim. All of this is at an optimal point ”, he asserted.
Here is TikTok. Gap’s classic hoodie got a boost thanks to the viral on the ByteDance social network.
“Our classic Gap hoodie is going through a moment, so much so that we reissued it in an antique brown to ship in advance this fall,” the company said. In addition, he added that there are “high search levels” on Google and that sales of the teen version of the hoodie far exceed adult sizes.
“This is a brand that is resonating. It is a brand that people care about and want to wear with pride on their chest ”, he assured.
The Olympic role
As well as hoodies, the Athleta sports brand from The Gap is also a huge success. According to the company, sales increased 27 percent compared to the same quarter of 2019, prior to the pandemic.
The information of CNN indicates that Athleta signed a contract with Olympic gymnastics legend Biles earlier this year, knocking Nike out of the game.
Gap hopes that Biles’ partnership with Atlheta will help the sports brand “really start gaining ground with the female customer,” Gap CFO Katrina O’Connell said on the conference call.
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Bringing all these characteristics together, Gap’s overall sales increased nearly 30 percent year-over-year and 5 percent from pre-school levels in the second quarter of 2019.
Also key to its success was Old Navy, as the brand’s US sales accounted for more than 60 percent of Gap’s total national revenue.
“Gap deserves credit for the way it runs Old Navy and has kept the brand fresh and interesting for shoppers,” Neil Saunders, managing director of GlobalData, said in a report.
The Gap hopes that Banana Republic, a much more casual business brand struggling to survive in the face of the pandemic crisis, will also start to take a turn this fall. For now, sales are up from pandemic levels, but they are also down 15 percent over the second quarter of 2019.
However, the company proved that with good strategy, collaborations and social media, any brand can move forward and survive crises.