Marka Hansen, president of Banana Republic, was announced as president of Gap North America on February 1, 2007. According to Bob Fisher, Gap Inc.’s CEO and interim president, Hansen has “demonstrated through her tenure at Banana Republic that she understands what it takes to lead an iconic apparel brand” (see article). These changes are hoping to boost the sales of the Gap chain.
Sales have been sliding in the Gap and Old Navy brands, but the Banana Republic brand has been doing better. Sales rose by 2% at stores open for at least a year during the shopping season. There have been speculations that Gap Inc. may sell off its Banana Republic brand, but nothing has been confirmed (see BusinessWeek.com article).
The main question: why are Gap and Old Navy brands declining in sales and the Banana Republic brand increasing? Although they are all very strong brand names, Banana Republic targets a different public and niche in the market when compared to Gap and Old Navy. Gap and Old Navy target similar publics, which may lead to cannibalization of their sales. Banana Republic may have a certain edge over the other brands, because it offers a specific type of casual clothing. Gap and Old Navy, on the other hand, are in a broader market of “casual wear.”
What should the strategy be to increase the sales of Gap Inc. and the struggling brands? Should Gap develop a new marketing and public relations campaign? Or position itself differently in the market? Will the new president of Gap North America be able to help the Gap brand? Right now, Gap Inc. is facing some of its internal weaknesses as well as some of the external threats of other competitors. What strengths can this company rely on to pull it through? Brand loyalty? How can Gap take advantage of opportunities in the marketplace to salvage the chain?
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I totally agree that the Gap needs to have some major changes to turn itself around. I notice just from shopping that the Gap hasnt had much to offer in the past year. Usually, they have great deals for stylish clothing but lately they have been slacking.
I am also a Banana Republic shopper and I am loving what they have to offer!! I can see why their sales have improved so much. The quality of their clothing is very good for a very affordable price. They also know how to stay with the latest fashion trends. Hopefully Gap can manage to do the same so they dont have to shut down!
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