The Era of Gap’s Mass Appeal Is Over—But Specialization Could Bring the Brand Back

With the pandemic offering a fresh start, the retailer seeks to reconnect with its roots and a new customer

Gap hoodie
The Gap hoodie is something of an American icon—but recent years have proved the brand can't rely on that status. GAP, Getty Images
Headshot of Diana Pearl

Twenty-some-odd years ago, few brands loomed larger in American fashion than Gap. Its signature logo hoodies were omnipresent at high schools and on college campuses, and Gap’s marketing attracted big names, with stars like Sarah Jessica Parker and Madonna fronting its campaigns. But perhaps nowhere was Gap’s influence more evident than at malls across America, where its stores populated shopping centers from coast to coast.

Cut to 2020: The American mall is a dying breed—a 2017 report from Credit Suisse predicted that between 20% and 25% of malls in the U.S. will close by 2022, a number that’s likely increased due to the Covid-19 pandemic. And as the mall has declined, so has Gap’s influence.

The Great Recession hit Gap’s revenue, and it started closing stores in 2011. Though it climbed back in the early 2010s, revenue began to fall again in the latter half of the decade. Sales were slumping even before the pandemic—in Q1 of last year, they were down 10%. At the end of 2019, Gap Inc. CEO, Art Peck, a 15-year Gap veteran who held the top spot for five years, abruptly left his post, and CMO Alegra O’Hare, who had been with the company for less than a year, announced her departure in January, the same month plans to spin off affordable retail brand Old Navy were scrapped.

Then came the pandemic, which has left few retailers unscathed. Gap has suffered, with sales falling 43% in the first quarter of this year (though its athleisure brand, Athleta, has been a bright spot for the company). At the end of October, Gap announced plans to close 350 stores, or 30% of its North American footprint, including its San Francisco flagship. Perhaps even more notably, within three years, the company said, 80% of its storefronts will be outside of malls, Gap’s one-time home base.

Nowhere was Gap’s prior influence more evident than at malls across America.Getty Images

But Gap’s woes can’t be blamed entirely on its presence in malls. And while the pandemic surely didn’t help, that’s not it, either. Rather, the retailer is suffering from a loss of identity. Its past reliance on the mall is certainly something to overcome, but other brands like Lululemon have proved shoppers will still head to the mall to visit a store they love, according to Bob Phibbs, CEO of consultancy The Retail Doctor.

“To say it’s the mall’s fault is exactly the wrong thing,” Phibbs said. “Quite simply, they became a promotional brand.”

In that sense, Gap’s problems are not unique. Some of its compatriots and competitors like J.Crew, which filed for bankruptcy earlier this year, are facing the same challenges: customers who expect discounts, a more crowded category thanks to DTC challengers and, at its core, a brand that’s lost sight of what it is and who it’s for.

“A lot a struggle has been about their brand and this lack of clarity in the current stage,” said Kalinda Ukanwa, assistant professor of marketing at the University of Southern California Marshall School of Business. “What is it that they stand for, and how are they relevant to the target market?”

What Gap has going for it is a legacy to lean on. Founded in 1969 in San Francisco, the brand has long been synonymous with quality staple items, particularly denim. Mary Alderete, who was quietly appointed as Gap’s new CMO in February following O’Hare’s departure, said that history will be a boon for the brand. Her first major campaign as CMO, rolled out in early September, zeroed in on that Americana aspect of Gap’s heritage. Called “Stand United,” the campaign included virtual activations and events encouraging voter registration. The brand positioning, Alderete told Adweek at the time, “was this idea of culturally relevant expressions of modern American optimism.”

@dianapearl_ Diana is the brand marketing editor at Adweek and managing editor of Brandweek.