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It takes thousands of passionate, dedicated and talented employees around the world to deliver the merchandise and shopping experience our customers expect and deserve. From color to concept, it all begins with inspiration--whether it's people-watching on the streets of Tokyo, a flash from a dream, or a visit to a local art gallery. Key Dates: 1969: Don and Doris Fisher open their first store in San Francisco, California. 1976: The company offers 1.2 million shares to the public. 1983: Millard Drexler is named president; the firm acquires Banana Republic. 1986: The first GapKids store is opened. 1987: The first international store is opened in London. 1990: BabyGap is launched. 1994: The Old Navy brand is established. 1997: The Gap Web site debuts. 2002: Drexler retires; Paul Pressler is named CEO.
comfortable. A member of a family that made its home in California for generations. including its namesake. and the United Kingdom. and children in over 4. and Paul Pressler was named CEO while Fisher remained chairman. Durable. jeans were the perfect uniform for a generation of young people anxious to demonstrate its antipathy to corporate America. stereo equipment. The firm sells a variety of casual-style and urbane chic clothing to men. women. they could . The Gap flourished through the 1980s and 1990s under the leadership of Millard "Mickey" Drexler but has battled tough times in the early years of the new century. Fisher and wife Doris. has evolved into a major retail company with well known brands. Japan. He realized that jeans had become more popular than current merchandising outlets could accommodate. France. Blue jeans. Capitalizing on the Generation Gap: 1969-75 Donald Fisher was not of the generation to whom The Gap owes its popularity. Fisher was 40 years old and a successful real estate developer in 1969 when he took note of a new trend among the city's increasingly disaffected youth. were suddenly becoming a part of the counterculture's standard costume. and acceptably offbeat. Banana Republic. California. Inc. Fisher was said to have conceived of The Gap when he was unable to find the right size of Levi's in a department store in Sacramento. and gasoline. cheap. and like hamburgers.250 stores across the United States and in Canada. The Gap. for years made chiefly by Levi Strauss & Co.Company History: Founded as a single store by Donald G. Germany. and Old Navy. Drexler retired in 2002. for laborers and outdoorsmen.
it was an immediate success.000 to 4. Doris. The stores were brightly painted.5 million annually. Inc. The Gap's sales were running at $2. Two years after opening its first stores. When Fisher incorporated his business as The Gap Stores. and wide selection proved irresistible to the huge market of 14. as the stores carried only one product. their stores' combination of jeans.to 25-year-olds. the Fishers kept stores small--about 3. and the Fishers converted the . he placed ads in local newspapers announcing the sale of "four tons" of jeans at rock-bottom prices. and the clothes were soon gone. often orange. Fisher opened a shop near San Francisco State University in one of his own buildings. To emphasize the youthful ambiance of his new store. Initially. Fisher added new outlets in San Francisco and was soon enjoying the benefits of chain store merchandising: centralized buying and advertising.be sold through a chain of small stores devoted solely to that product. many of them enclosed in malls. the Generation Gap." and usually enlivened by rock and roll music. With the help of his wife. but at first no one noticed the jeans. low prices..000 square feet. They located most of their stores in shopping centers. Although the Fishers had no experience in retailing. excellent name recognition. jeans by Levi Strauss & Co. an allusion to a then hot topic. The Gap Stores' buying program was singularly uncomplicated. To hold down rental costs. filled with circular metal display racks known as "rounders. In desperation. Fisher named it The Gap. offering a combination of records and jeans. and Fisher was driven close to bankruptcy. and uniform pricing. Their intention was to attract jeans customers by means of the records.
purchasing. big sellers were kept on the rack until they stopped moving. Coincidentally. light jackets--each offered in its complete range of colors and sizes. Such dependence on a single supplier had obvious dangers. as well as national brands other than Levi's. These proved crucial to the company's short. and its offering of 1. the Fishers were ready to make their first substantial public stock offering. however. and around 1973 The Gap began marketing several labels of its own. and marketing functions of what was soon a sizable corporation.and long-term health. which provided 100 percent of The Gap's merchandise during its early years. rather than being retired in favor of new styles simply for the sake of novelty. sales had increased almost 50-fold. spread over 21 states. Ups and Downs: 1976-80 By 1976. its prices were low and stayed that way. they opened stores across the United States while maintaining tight control over the critical accounting. With extraordinary celerity. and only a few items were stocked--jeans. to $97 million. The company's growth was also made possible by the extensive national advertising of Levi Strauss. Analysts credited the company's success to the Fishers' observance of a few cardinal rules of retailing: Gap stores replaced its stock with maximum speed. shirts.2 million shares sold quickly at $18 per share in May. . In five years. The company's spectacular growth had attracted widespread interest. though they retained the great majority of stock. and the number of stores had grown to 186. ensuring a minimum of disappointed customers.company into a public corporation. by 1975 Gap stores generated $100 million in net sales.
8 million. These charges came despite the fact that the Fishers sold only about 10 percent of their holdings during the period in question.however. and more conservative. Several experimental chains featuring upscale fashions were essayed and brought together under the Taggs name but later liquidated because they were unprofitable. however. Gap stores were enlarged to handle increasing amounts of what became known as casual wear and were frequently moved outside of shopping centers to freestanding locations. wealthier. Rather than wage endless litigation. or 40 cents per share. prompting nine separate class-action suits from outraged stock purchasers who alleged that the Fishers had tried to dump their holdings before The Gap announced its bad news. which. pushed the company into the red for the final quarter of its fiscal year.25. The jeans market was no longer quite so straightforward. the company could pay such a figure without undue strain. The value of the newly issued stock fell to $7. and did its best to mend its frayed relations with Wall Street. . The Gap pushed its sales to $307 million in 1980 and was close to achieving nationwide representation. The Gap settled the suits in 1979 for a total of $5. the retail industry went into a steep slide. Members of the great wave of youngsters who had come of age wearing blue jeans in the 1970s were now older. By the end of the 1970s. when combined with The Gap's large expenditures for new stores. ending July 31. where space was plentiful and rent lower per square foot. and the Fishers were busily attempting to break out of the jeans niche by expanding The Gap's selection of clothing. Adding between 50 and 80 stores annually.
After a stint at Macy's.C. Drexler accepted the job as president at the end of 1983 (sales $480 million) and was given a block of stock that would make him one of the country's wealthiest retail executives. who was contemplating the future of The Gap. The company's own brands. Penney with its jeans. Drexler immediately began The Gap's wholesale transformation. underscoring The Gap's need to develop a label and look of its own. Drexler. he became president of AnnTaylor in 1980.Along with the search for a line of clothes to appeal to an older clientele. The new president found little that he liked. created during the 1970s. Levi's were now sold everywhere.'s decision to supply big mass marketers such as Sears and J. then 40. Considering that ten years earlier essentially all of The Gap's sales were Levi Strauss & Co. in spite of the company's currently excellent financial status. Drexler was born in the Bronx to a family with roots in the garment business and by age 23 was a buyer for Bloomingdale's. generated about 45 percent of Gap sales in 1980. products. exclusively Gap image. creating a more chic image for the chain and quadrupling sales in the bargain. had just solved a similar problem with AnnTaylor. Donald Fisher hired Millard "Mickey" Drexler as president in 1983. the Fishers also faced Levi Strauss & Co. where his work caught the eye of Donald Fisher. the 1980 figures represented an achievement. Mickey Comes to Town: 1981-86 To accomplish this task. proliferating . but it was clear that if the company were to avoid inundation by the rising tide of jeans discounters it would have to fashion a new. with Levi's adding an equal amount and other national brands making up the balance.
made of natural fibers.competition in jeans and The Gap's youthful marketing image had forced the company into a price-driven volume business. Drexler created a large inhouse design staff to develop clothes that would be casual. The company's advertising. Neutral grays and white replaced the garish orange. The Gap would be known not only as a store. shifted from radio and television to upscale magazines and newspapers and featured older models engaged in familiar. and more clearly differentiated by gender than were jeans. skirts. and the ubiquitous rounders gave way to shelves of neatly folded clothing under soft lighting. The look was informal but classic-still denim-based but including a variety of shirts. It was clothing for people who wanted to look and feel young without appearing slovenly or rebellious. Its orange-painted stores were cluttered with rounders displaying merchandise of many labels that Drexler later described to the New York Times as "trendy but not tasteful . It would be difficult to overcome The Gap's 15-year tradition as the place where kids went to pick up a pair of Levi's. Levi Strauss products were kept but relegated to the background. outdoor activities that were not necessarily connected with the youth culture. but as a line of clothes as well. well.S. . a description that fit a vast number of U. just plain ugly. Gap stores were substantially revamped. and sweaters in assorted colors and weaves. Drexler began by eliminating all private label brands but one: Gap." Worst of all. henceforth. consumers in the 1980s. as devised by Drexler's longtime colleague.. blouses. most consumers perceived The Gap as strictly for teenagers at a time when people who grew up in the 1960s were developing more upmarket tastes.. Magdalena (Maggie) Gross. simple.
The two-store chain of safari and travel clothing outfits. Banana Republic's sales doubled each year through the mid-1980s but slowed quickly thereafter. not The Gap.2 million. Despite the mixed results of the Banana Republic acquisition. founded in 1979 by another California husband and wife team. Gross revenue. Foremost among these was Banana Republic. Gross launched the "Individuals of Style" campaign. and same-store sales were all up. the company had fresh energy and a merchandising focus that could carry it for years to come. more importantly. and they were enormously successful in helping to change the public's perception of the company. The ads stressed style. however. the word "stores" was dropped from the company's name. it was clear he had pulled off something of a miracle. with profits down 43 percent to $12. The Gap came to mean good taste of an informal variety. Drexler's revolution at The Gap cost a good deal of money. had a well-established catalogue business. the company continued to seek out other chain stores. for better and worse. whose clothes did not always appear in all of the photos. profits. Pottery Barn . By the middle of the following year. In the meantime. In addition. bought by The Gap in 1983. a series of black and white portraits of both famous and unknown subjects by a team of celebrated photographers. and financial results for 1984 were poor.A few years later. After its acquisition and the introduction of private-label clothing lines. The Gap had acquired a number of other retail chains. and the brand name Gap soon acquired the cachet needed if the company were to compete with other retailers of casual wear such as Benetton and The Limited. Melvyn and Patricia Ziegler.
Canada. Drexler sought to fill another clothing need of the baby boomer generation with the debut of GapKids. Hemisphere offered elegant fashions but soon ran afoul of a severe recession. and along with Banana Republic (which peaked in the late 1980s with revenue of more than $250 million a year) figured largely in The Gap's long-range planning.S. GapKids prospered and launched a new venture. it was liquidated in 1986. a nine-store chain of upscale U. Disposed of only two years later. The concept was a huge success. Unfortunately. after several problematic years. babyGap was a phenomenal success and became a popular attraction in GapKids stores. Additional stores soon sprang up throughout the United Kingdom. The Gap also tested the higher end of the clothing market with Hemisphere. The Gap decided to try its wares outside the United States. featuring comfortable. That same year. neither the Hemisphere mistake or the demise of Pottery Barn was serious enough to cause more than a few tremors at the parent company. The Gap Continues Its Climb: 1987-96 By 1987. stateside. Banana Republic's safari gear bubble burst.was a housewares chain of about 30 stores in New York and California. durable clothes for the children of parents who shopped at Gap stores. In 1990. and it became a moneylosing liability. babyGap. Like its sibling. Created in 1987. as Banana Republic searched for secure footing. the same year the company broke $1 billion in sales. and its first international store was opened in London. and France. sportswear with European styling. whose spectacular rebirth in the Drexler era left ample room for such experimentation. For the start of a new .
5 billion. with plans to expand total sales area by 15 percent annually.2 percent respectively due to another stock split in June) in 1991 and virtually every year since Drexler's program had taken effect in 1985. Not only had The Gap followed its Baby Boomer clientele as they grew older and wealthier. In the early 1990s. Along with refurbishing stores and placing more emphasis on women.5 million. it provided for their children. the "grunge" and "slacker" looks). The Gap came back with record numbers in 1993 and a new franchise. Lacking the trademark flare associated with the . and 40. and return-on-equity were all outstanding ($2.216 stores in the United States. Though 1992 marked a dip in profits and sales growth due to slower turnover and increased competition. revenue.decade. In 1991.092 stores pulled in $1. The Gap was looking very good indeed: a stock split occurred in September.8 million.9 billion in sales with net earnings of $144. Canada.. Overall. and at year-end the company's 1. the company addressed these problems by turning away from unisex clothing to more gender-specific items. $229.e. Banana Republic was busy refocusing its image while GapKids and babyGap flourished. which now operated more than 1. too. The Gap's transition from a discount jeans warehouse to a sleek fashion arbiter was not altogether painless. with most of the more than 223 GapKids stores housing a babyGap department for infants and toddlers. GapKids was the fastest-growing segment of the company as a whole. net income. because for some it had become increasingly cool not to spend money on clothes (i. and the United Kingdom. yet the result had been more successful than Donald and Doris Fisher ever imagined. the Fisher family still held more than 40 percent of the company. originally called Gap Warehouse. though.
Drexler hired an outside to firm to come up with a new name to no avail. jewelry. once a blemish on the perfect Gap picture. featuring different collections. Banana Republic. and 131 Old Navy. 437 GapKids. meanwhile. personal care items. the upscale clothier initiated a shop-within-ashop concept. was gaining ground with urbane elegance as a hip alternative to The Gap's casualness. 902 Gap. 4 in Japan. 55 in the United Kingdom. Banana Republic. Old Navy increased its market share by doubling in size. Likewise. 12 in France.4 billion. there were 1. filled with sturdy. To shore up its product line. a sharper focus on women. Despite the circumstances of its birth. and 2 in Germany in 1995.507 Gap-owned stores (188 were Banana Republic) contributing to the company's $3. there were 1. sales leapt 18 percent to nearly $4. The Gap's statistics were robust: a two-for-one stock split paid out dividends in March. exceeding the company's . Drexler saw the perfect moniker for the downmarket stores painted on a building: Old Navy. value-priced (20 to 30 percent lower) clothing for the entire family. and five new stores in Canada. International stores had surged from 1994's 124 (72 in Canada.company. Old Navy became another Gap sensation. including footwear. At the same time. Within a year. had blossomed with more new products. Then when strolling in Paris with colleagues. By 1994. and net earnings rose 11 percent to $354 million over the previous year's $320 million. and 3 in France) to 91 in Canada.680 stores--210 Banana Republic. and leather accessories.72 billion in sales. 49 in the United Kingdom. Hence Old Navy Clothing Company. with stores nearly twice as big as other Gap stores.
By 1996. its sophistication and ever-growing consumer base more than made up for it.hopes for its newest division. Nino Cerruti. Todd Oldham. manufacture. and freestanding babyGap stores. display. The Gap debuted GapScents and continued to broaden its age range and clothing lines to include work attire. changed fashion for not only baby boomers but for generations to come. while Gap and GapKids lost some of their momentum. and Cynthia Rowley paid "tribute to the little company that became master of the universe. and still kept a hand in running the company he founded nearly 30 years before. although babyGap maintained its prominence. New directions for GapKids and babyGap included plush toys. His successor was Mickey Drexler. If The Gap's clientele was not quite as broad as some department stores or mass marketers. Yet perhaps the biggest news of 1995 was Donald Fisher's decision to relinquish his duties as CEO of The Gap. The Gap--its name formerly a quirky play on . with its burgeoning cluster of stores and subsidiaries. especially through vertical integration. The Gap maintained exceptional quality and consistency in an increasingly erratic marketplace. The Gap's success was in no small part due to Donald Fisher's and Mickey Drexler's business acuity. By keeping the design. The industry even honored the company in the April issue of Elle when such high-brow designers as Giorgio Armani. The Gap's dominance of the fashion scene was fixed. The Gap. Inc. consumers of all ages could find something in one of its stores. other non-clothing items. Fisher remained chairman. packaging. and ultimate sale of every item with its name in-house. shipment. advertising. inspection." Though it began with a singular purpose. however. who added the responsibilities of CEO to those of president. Carolina Herrera.
emphasizing a return to simplicity and the company's most basic offerings--pocket tee's. The Gap grew at a rapid clip during the latter half of the 1990s. jeans. Drexler felt The Gap had strayed too far into the trendy genre and was losing customers as a result. As such.5 billion. That year. the company had grown by 24. he retooled The Gap's image in 1997.com and babygap. According to the National Post. the firm went back to television advertising with commercials that highlighted Gap Easy Fit jeans featuring well-known celebrities that included Lena Horne. Thanks to Drexler's efforts. bolstered by the opening of 356 new stores. Sales climbed to $9 billion the following year. securing record sales and earnings. In 1997. Banana Republic and Old Navy began catering to online shoppers shortly thereafter.generational unrest--came to mean the ultimate in fashion and taste for both younger and older generations.000 percent from 1984 to 1999. Drexler's reign at The Gap had become one of the retail industry's amazing success stories. Long-time advertising director Maggie Gross left the firm after Drexler pulled the plug on a print campaign that did not gel with The Gap's new basic image. . and khakis. In 1998.com along with gapkids. and Luscious Jackson.1 billion. LL Cool J.com. Late 1990s and Beyond By the late 1990s. the firm launched another round of highly successful television commercials--this time the star being its line of khaki pants. 570 new stores were added to the company's arsenal as net earnings exceeded $1. The company could now claim that one new store opened each day. sales at Old Navy surpassed $1 billion while overall company sales grew to $6. In 1999. The company also began its foray into e-tailing and introduced gap.
"Simply put. strategic planning. Gap Inc. Drexler announced his retirement during 2002. the company opened 731 new units and sales grew to $13. Fisher began his search for a new leader." Indeed. Net income for fiscal 2002 bounced back to $477 million. an executive from Walt Disney Co. Crew Group Inc. has alienated shoppers. net income fell to $877 million while comparable store sales fell by 5 percent. In April 2000. The formula that made it great no longer has the same currency. "The Gap has lost its groove. Pressler began to implement a series of sweeping corporate changes focused on customer research. After Drexler's departure.The new century. and store closures. The retail environment in 2003 remained fiercely competitive." wrote Anne Kingston of the National Post. sales began declining. however. On the other hand. new advertising. Various labor groups claimed The Gap advocated sweatshop labor overseas. brought with it rocky times for the 30-year-old retailer. Paul Pressler. however. one whose management style could catapult The Gap back into the upper echelon of retail fashion. the company created a global monitoring program to supervise factory conditions where its clothes were manufactured. was tapped to revive the company just as Drexler had been called up to do in the 1980s. During 2000. Its merchandising is unfocused and it has lost ground to competitors. In response. He later took a job to head up rival J. Pressler knew he had his work cut out for him. Disaster struck in 2001 when the company posted a $7. The Gap had also come under fire for its labor practices in third-world countries. . the company was losing market share in the over-30 category and was having difficulty appealing to a younger audience. More damningly.6 billion. Not surprisingly..7 million loss.
Further Reading: Abend. p 24. p. Shabi. babyGap." New York Times. Despite these distinct challenges." Fortune." Fortune. April 14.. Principal Competitors: Abercrombie & Fitch Stores Inc. 2003. Smith." National Post. . Kingston. November 9. Munk. April 1. "Gap or Crap? A High Street Brand Under Pressure. Caminiti. Bensimon. 2003. Barmash." Stores. June 17. 1991. 110. Karr. "Gap's New Guy Upstairs. American Eagle Outfitters Inc. "How They Learned to Stop Worrying and Love The Gap. "Bridging the Gap." Money. Isidore. "Changing of the Guard. May 4. both Pressler and Fisher were convinced that The Gap and its brands would carry on as a mainstay in the retail fashion world in the years to come. Jules. 1995. 2002. March 18. 1996. September 1..prices were down. Giles. 2000." WWD." New Statesman. "Will Old Navy Fill the Gap?. Patricia.. Spiegel Inc. "Gap Finds Middle Road to Success. August 3. Susan. Old Navy Clothing Company. Principal Operating Units: Gap. April 1996. June 24. 2002. Stephanie D." Elle. "Gap Lands in Japan." WWD. "Widening the Gap. Banana Republic. Arnold J. Nina. "Gap Gets It." Fortune. 61. p. November 1985. GapKids. Anne.. p 2. Rachel. 1998. and the economy remained questionable. "Gap's Sales Drop: What Happened?. Sellers.
Vol. p. Jonathan." Vogue. The Gap Made a Billion Giving It to Them. .Van Meter. St. May 1990. 2003. "Fast Fashion: Americans Want Clothing That Is Quick and Easy. Jennifer. 2002." WWD. Weitzman.'s Dire Years: 24 Declining Months and More on the Way. "Gap Inc. Source: International Directory of Company Histories. 1. 55. May 9. James Press.
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