Gap admits defeat and announces brand strategy review

by Joanne Payne, Brand Republic 05-Jan-07, 09:00

LONDON - Gap, the company that helped make khaki beige a fashion statement, is to review its Gap and Old Navy brands after the retailer revealed disappointing sales in December and expected increased pressure in January.

Total sales for December were down by 10% on results posted two years ago, at $2.34bn (£1.2bn). The company has been in the middle of a two-year rebranding operation but has admitted it has failed and will review its strategy at the two divisions.

Gap has suffered in recent years and each new set of financial results have brought new problems as the San Francisco retailer finds competitors have emulated its essential casual style of T-shirts and khakis and at a cheaper price.

It has been some time since Gap has advertised in the UK. Its last major campaign featured singer Joss Stone in a one-off campaign singing 'The Time is Right', a track that was released as a limited-edition download.

However, this situation could change as Gap reviews its £30m pan-European media account. MediaCom and PHD are pitching against incumbent ZenithOptimedia. The key markets for Gap in Europe at the UK and France.

Gap reviewed its US media account earlier this year and appointed Carat to the $100m business in June. PHD was the previous incumbent.

Gap has been focusing on European advertising in increasing detail and poached Claire Dobbie from Mother to work as European marketing director in 2005. Its advertising is handled by US agency Laird & Partners.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.