Last week Gap announced it was considering the exit of company-owned retail in the UK and Europe, which was a sad but nonetheless not entirely surprising revelation (it’s officially a decision “under review” but no one really expects it to change its mind). However, at a time when its relaxed, reasonably priced basics should be in high demand, why has it failed to recapture the attention and spend of the British consumer?
When Gap arrived in the UK in the late 80s, its timing was impeccable. Grunge was on the horizon and Gen X, the so-called slacker generation, was drawn to its normcore aesthetic, democratic prices and its refreshingly minimal stores with bleached wood flooring.
Its advertising was aspirational while its clothes were accessible and its messages of inclusivity and love (reflective of its roots in 1960s San Francisco) would play out well with Gen Z today if it bothered to invest in advertising and marketing (and, crucially, design) in the way it once did.
Over the years, Gap has been worn by superstars and supermodels and even managed to persuade the highly elusive electronic dance music duo Daft Punk to appear in one of its ad campaigns (along with Madonna, Missy Elliot and Lenny Kravitz to name a few others). And who can forget 1998’s “Khaki Swing”, the campaign that was one of the earliest examples of viral advertising when the internet was in its infancy?
Gap took risks then; it was fun and it had wide appeal. But throughout the 2010s it has limped along and even its once failsafe kids brand has managed to feel like it lacks relevance. Its reputation hasn’t been helped by a constant stream of negative corporate updates and global store closures over the past few years. And is it ever not on sale?
The exit of design chief Rebekka Bay in 2014 also felt totemic because it marked the end of the brand even trying to have a single creative director. Bay had been the high profile designer behind H&M’s COS and it was thought her eye for taking Gap’s all-American aesthetic and making it more relevant to a European audience would be crucial to its global success.
But Bay only lasted two years after consumers failed to appreciate her subtle design tweaks that had garnered such success at COS (a far more niche and elevated brand). Bay had replaced previous design chief Patrick Robinson, who also drew criticism for trying to take the brand too upmarket with subtle designs and muted colours while forgetting its core customer, who wanted brightly coloured knits and plaid shirts (especially at Christmas).
Amid the store closures and lack of coherent creative direction Gap lost its confidence and that of the consumer and, in the meantime, other brands came into the market and stole its share of spend.
“I would say the majority of the Gap customers, who want stylish basics, now shop at Uniqlo.”
Marcus Jaye, TheChicGeek.co.uk
“Gap’s original proposition in the 90s of fresh white tee, blue denim and blonde wooden floors was an attractive one and people were willing to pay a premium for. This was against a backdrop of a dull high-street with little in the way of competition for its clean and commercial basics.
“Fast forward nearly 30 years and it hasn’t moved on. It thinks it can still trade on this original idea. In order to motivate customers they are always on sale or promotion and the product doesn’t feel exciting or inspiring. I would say the majority of the Gap customers, who want stylish basics, now shop at Uniqlo,” says industry watcher and journalist, Marcus Jaye, creative director of TheChicGeek.co.uk.
Gemma Boothroyd, apparel analyst at GlobalData agrees, and says that the shift to working from home and comfort clothing has come too late for Gap to capitalise on, at least in Europe. “Despite comfortable clothing being in demand this year as European consumers have spent more time at home, it was too late for Gap to leverage its existing product lines, with its reputation already damaged by years of lacklustre ranges. Although globally Gap managed to practically double its e-commerce business to account for nearly 50% of total sales amidst the COVID-19 pandemic, this success did not translate to Europe, where second quarter total sales ending August 2020 plummeted by 47%,” Boothroyd says.
“Despite comfortable clothing being in demand this year as European consumers have spent more time at home, it was too late for Gap to leverage its existing product lines.”
Gemma Boothroyd, GlobalData
“As one of America’s most iconic retailers, Gap could formerly rely on the lustre of its American name to establish international prestige. But its cultural legacy no longer holds weight for European consumers, who have lost interest in Gap’s uninspiring apparel. Given that European consumers have no patriotic allegiance to shop with the brand, Gap’s inability to remain relevant has resulted in a significant decline, and it has lost the market share it had once carved out in Europe.
“The shift to working from home alongside tumbling demand for occasionwear from cancelled events could have been a real opportunity for Gap, which was formerly renowned for its high-quality basics. Yet other retailers, such as Fast Retailing’s Uniqlo are simply doing it better. By focusing on reliably timeless styles rather than short turnaround trends, Uniqlo has thrived by maintaining a clean and simple, appealing product offer. Comparatively, Gap has spread itself too thinly, and even with consistent and heavy product discounting it has been unable to capture European shoppers’ interest.”
The point about consumers feeling no patriotic allegiance to Gap during this time is an interesting one. In the times that we are in, there is evidence that consumers are gravitating towards brands they want to see make it through the pandemic and which have a particular set of values they can relate to.
Gary Assim, partner at leading law firm Shoosmiths, which represents many leading fashion brands says that Gap’s decision comes amid a global movement towards localisation, in part, but not entirely, brought on by COVID.
“Unfortunately, this is not one way traffic. We are seeing a number of UK/European retailers retrench from the Middle East and the US back to their home countries. We are going through a mini de-globalisation at the moment where, amongst other things, US tariffs and COVID-19 have created a perfect storm for more localisation,” Assim observes.
Of course Gap is far from the only US brand to beat a retreat from the UK; it pulled its own brand Banana Republic out of the UK in 2016 and American Eagle, Forever 21 and, most recently, J.Crew have all closed their UK stores. The mistake they all seem to have made is to believe that the UK consumer is just a lite version of the US consumer, when the differences are far greater than they may appear on the surface (the UK likes its fashion more edgy than America). Also the cost of doing business here is far greater too. Some are surprised Gap has lasted so long.
“By far the greatest surprise is that it has taken so long to call it a day. They could and should have done so decades ago.”
“I doubt that Gap has ever made any meaningful money in the UK when properly costed. It arrived here in 1987 and broke numerous records for rentals, outbidding all comers. It’s offer has been on semi-permanent sale for more than a generation. What was a fresh, new casual look when it launched in San Francisco in 1969 has remained static and become passe. By far the greatest surprise is that it has taken so long to call it a day. They could and should have done so decades ago,” says pre-eminent retail analyst Richard Hyman.
Of course, Gap won’t be disappearing altogether if it does decide to close all its company-operated stores (if approved this would take place by the middle of next year) the plan is to continue to offer its products online with a physical presence driven through franchises and partnerships. But with whom? Some suggest Next may possibly be a good partner, given it has recently taken on the UK franchise for another US brand that lost its way, Victoria’s Secret. In addition Next has vast experience selling third-party brands online, but would Gap’s offer really stand out among the crowd there?
The announcement that the firm was entering into a creative partnership with rapper and designer Kanye West (who once worked in a Gap store) caused much excitement and hope that something truly inspirational might be on the horizon but, realistically, that may never happen since the unpredictable star Tweeted that he wouldn’t carry on with the deal unless he was appointed to the board.
And how do you turn a brand around when the mere shift to using sans serif font in its logo in 2010 caused such consternation among its customers that it was forced to backtrack within the space of a week? Balancing familiarity with innovation is going to be a tricky path to tread but perhaps a retreat to its home market and a period of time spent rediscovering what it stands for, and what sent the world crazy for it back in the 90s, will be what Gap needs to come back stronger. And it would be nice to think that it does come back, one day… along with those great ads.