It was the fashion chain that made “Casual Fridays” possible. With its signature khakis, button-down polos and T-shirts, the Gap could do no wrong.
But now the uber-company’s popularity is tanking. It’s closing eight stores in New York City, looking to lay off nearly 10,000 employees and its management has been is in disarray for months.
The problem? The Gap wanted to be trendy.
In a bid to spice up its image, the clothing store has ended up alienating its biggest fans the baby boomers and Generation X-ers who loved its stylish, no-frills clothing.
“The Gap is no longer attracting its customers because they’re no longer designing the basic clothes that everyone wants in their closets,” said Elizabeth Pierce from Wedbush Morgan Securities in California.
“They’re now doing this hybrid half-casual/half-trendy clothing that’s not appealing to anyone.”
In the latest blow to the nation’s largest clothing chain, the Gap is looking to cut its headquarters staff by 5 to 7 percent.
Experts say it’s clear the company’s cutting back because it’s failing to wow fashion-hungry college grads, teens and ‘tweens.
The Gap has quit producing the basic pieces that were its foundation and is instead promoting cropped pants in wild colors, skimpier Ts and tanks that office dwellers find too risqué.
And since the Gap has also failed to design clothes that appeal to the younger generation, the company is being clobbered by funkier and smarter chains like the Swedish group H&M (Hennes & Mauritz), American Eagle Outfitters, Abercrombie & Fitch, Pacific Sunware, Hot Toppix and Club Monaco.
“There’s no strong conviction in the Gap’s style these days. I think they need to use a lot of focus groups and a lot of customer service to appeal to the 23-year-old girl who’s hip,” said financial analyst Bob Buchanan of A.G. Edwards & Sons in St. Louis.
“When you look at the Gap’s ads and compare them to who’s walking in their stores and buying the merchandise, it’s baby boomers and the people in the ads are 18 years old.
“There’s something wrong with that.”
In April, Gap Inc. (parent of the Gap, Banana Republic and Old Navy stores) posted a decline of 2 percent in profits while teen fave Abercrombie & Fitch showed an increase of 6 percent, and American Eagle Outfitters chalked up increases of 22.7 percent.
H&M has had its biggest gain in nine years, a 37 percent growth in profit in the second quarter.
H&M made its New York debut last March with its first megastore at Fifth Avenue and 51st Street, and often offers clothes for less than $20 less than half the Gap’s prices.
“H&M is cannibalizing its competition,” Pierce said. “The younger generation doesn’t mind paying next to nothing for clothes that they could toss out if the trends change quickly. The Gap stuff is more expensive and is not cutting it.”
The Gap has tried to right itself using cutting-edge ad campaigns but experts say Gap CEO Millard “Mickey” Drexler has some serious work to do.
“It’s really up to Mickey to find out where this company is going to go,” Buchanan said. “He has to decide whether it’s worth eliminating the core customers that the Gap has enjoyed over the years to change the Gap’s image.”
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Why don’t you shop at The Gap anymore? (VOX POX)
“The clothes are too simple. They’re not as stylish as they used to be.” – Sarine Gulesserian, 23, Valley Cottage
“I think that it’s less popular now. A lot of stores have come out with similar clothes.” – Eugene Silvestre, 22, Bronx
“The prices are very high. I usually wait for a sale to shop here, but they usually only have crappy size zeros on sale.” – Maddie Alban, 28, Manhattan
“I don’t really shop here anymore. It’s not as popular with my friends as it used to be.” – Cecilia Arevalo, 24, Central Islip