In 2012, Gap tried to get back on track and hired Rebekka Bay, a Danish fashion designer who gained attention for her COS minimalist clothing line for H&M. However, her partiality toward grays and blacks did not mesh with Gap’s happy, all-American aesthetic. In January, Gap fired Ms. Bay and eliminated the creative designer position altogether, hiring Wendi Goldman as Gap’s new head of product design and development. Gap sales have been declining ever since, and without a fashion direction the only way for them to compete again is to close stores and restructure their company.
Jeff Kirwan, Gap’s global brand president said that some stores were “just not appropriate anymore.” He said, “We’re changing the way we bring product to market, taking out redundancies, efficiencies within the organization.” Gap estimates that its cuts will trim about $300 million from annual sales and will incur one-time costs of about $140 million to $160 million, mostly in the second quarter due to lease buyouts, inventory write-offs and the costs associated with shrinking the corporate headquarters work force. But by 2016, the company hopes to generate annualized savings of about $25 million. They are hoping to make the company more nimble, and the job cuts at its headquarters are intended to make operations faster and more decisive.
Hopefully with these store closings Gap will be able to revamp their brand and focus on a product aesthetic that is more appealing to their target audience. While normcore may be the fashion trend, clearly being a normcore brand from the very beginning does not guarantee that consumers will buy your brand. These store closings and job cuts at corporate headquarters will hopefully enable Gap to become a leading retailer once again.