Gap is Back: Don't Call It a Comeback

For years the brand's parent company (The Gap Inc., which also owns Banana Republic, Old Navy, and Piperlime) has seen declining revenues and same-store sales. In 2010, Gap suffered a humiliating logo redesign failure, and last year it announced 189 store closures in North America.


Yet signs of a turnaround have emerged. Since the beginning of 2012, The Gap, Inc. stock price (ticker symbol: GPS) has increased 60 percent and same-store sales at Gap are up 9 percent. Analysts agree that colored denim sales have fueled growth; early trend recognition was key, and the company made colored jeans the focus of its spring 2012 campaign "Be Bright".


Of course trends are susceptible to fad risk, and this one will surely wear itself out; that is why at this potential inflection point Gap should take the opportunity to optimize its brand strategy by fixing its incoherent brand architecture and finalizing its plans for a logo redesign.


Brand Architecture
The Gap master brand endorses several sub-brands, but the company makes no commitment to either a "branded house" or "house of brands" approach. The canonical examples of each are GE (branded house) and Proctor & Gamble (house of brands). Unfortunately, Gap settles for a suboptimal hybrid model.

NYU Stern's resident brand strategist Professor Galloway teaches his students to have a bias toward a branded house, as it simplifies marketing efforts and reduces overall marketing spend. Below I have constructed a coherent brand architecture for Gap compared to its current configuration. All sub-brands use the Gap name as a prefix and endorser, except for the recently-launched co-branded collection with Diane von Furstenberg – in this special case, I assume the DVF brand has more equity amongst consumers.


Logo
Gap botched its attempted logo redesign in 2010, and the company knew it immediately. A quick review of design websites and the company's Facebook page reveals feedback that was instant, almost universally negative, and brutally honest. In response, Gap's public relations team attempted to reposition the new logo as a work in-progress, flirted with the idea of crowd-sourcing a new design, and announced a design contest. I can find no record of a contest winner, and instead the company has since employed conflicting logos in its stores: the storefront uses the traditional, all-caps logo with the blue background, whereas many of the tags on the clothes display the Helvetica font used in the redesign. At best this was simply poor PR work that has caused brand confusion; at worst the company failed to admit a mistake, treated its customers like fools, and wasted millions of dollars in shareholder value.  
 
Critics focused their complaints on the change to Helvetica font and the strange gradient box, and in general favored keeping the current logo. I agree with the critique but not the solution. Clearly, the brand wants to evolve its logo but does not know how after displaying such poor execution in 2010.


Gap should look to another classic American brand for inspiration – Starbucks, which has developed an imitable model for logo evolution. Each iteration of the Starbucks logo retains the circular shape and some form of the siren symbol. Since 1987, the company has used the color green in its logo as well as on storefront signage.

 
Similarly, Gap should retain the square shape and navy color of its current logo. The brand tried to use Helvetica font in its failed redesign; while design critics will argue that the font is too ubiquitous, I see no harm because Gap has utilized Helvetica for its print advertisements and in-store displays for years.


By creating a more coherent brand architecture and fixing its logo problem, the Gap will have the right brand strategy in place to continue its turnaround.