The Gap Inc.
Among the most recognized brands in the industry of apparel The Gap brings to mind distinction, style, trends, good taste and success. The company has worked for a period of about 40 years to steadily win this kind of recognition and also to earn a bigger share in the budget of Americans when it comes to invest in their clothes and appearance. Gap has aimed and succeeded into becoming a lifestyle in itself.
Gap started as one store in San Francisco, that due to good management it grew progressively both geographically and in concept in a very American-dream way, from scratch and one idea of a normal middle-class couple, up to an international corporation that sells about 16 billion dollars per year. This due mainly to a steady hand when it comes to see through the needs and tastes in the market and also to outstanding leadership and human resources .
For about 15 years the company was managed by the owner, Donald Fisher, later by Millar Drexler, who in time became a legend in business. Lately, in 2002, due to a substantial decrease in sales and margins, the leadership was put in the hands of Paul Pressler.
The definition of the business was done in the '90, the concept was to provide the basics for a personal closet. The clothing was done in good quality and the shopping itself was meant to be a very pleasant experience for clients.
The trend in the last ten to twenty years indicated a steady increase in income in the US and also in prices for the producers. The financing sector was aggressively marketing new products such as consumer and discretionary spending debt in the form of second-home mortgages and credit cards. This bode good for retailers and luxury items merchants. Consumer spending in clothes was the fourth after food, lodging and healthcare.
However since 2003 on, the US faced an increased problematic of the Irak war, which meant a financial cost and also an important international oprestige and diplomatic cost. Such situation permeated to other aspects of the US life and rubbed off on how the world saw the country and their interests. Companies such as GAP need to measure the incidence of such situations in the long term development and standing of their brands.
Other situations that affected the growth of Gap and other similar retailers were:
The importance of the right apparel and self-image has took off in the US. People are very conscious about this because of media, propaganda and TV efforts. The image of the successful woman has been taken directly from series such Sex and the City.
However, the rate and change of late of the trends and mind of the consumer is very fast and harder to figure out than it may appear at first. One thing to be expected is that there will be more of global trends, as internet, TV and magazines cycle news in a matter of hours.
On the other hand, consumers in the same age target of GAP have felt more liberty in what concerns their style. They aim for a personal concept and consequently look out for a less standard choice when it comes to clothing.
There is a lot to be said about differentiation of the culture in small and big towns. Cities such as New York flourish in a more chic trendy style while the small towns tend to a certain degree of liberty in what comes to work and dress-down clothing.
Due to the globalization it is also an important matter to know that a global business and brand is ethic and equitable when it comes to hiring foreign country workers and suppliers. New reports showcasing a scandal or comedy shows spoofs that deride or exploit a problem may proof to be catastrophic for a brand.
Finally it will be interesting to see how the industry of apparel in the US will survive the present economic disaster. I am afraid that the high end clothes such as GAP and others will see the shorter end of the stick in the next few years. Though luck.