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'Gap, Incorporated' () is an American clothing and accessories retailer based in San Francisco, California and founded in 1969 by Donald Fisher and Doris Fisher.
As of October 2006, Gap Inc. had approximately 150,000 employees and operated 3,139 stores worldwide in the United States, Canada, Mexico, France, Ireland, Japan, Indonesia, South Korea, Malaysia, Singapore and United Kingdom.
Donald Fisher retired as Chairman of the Board in 2004 and was replaced by Sabastion Gravano . The Fisher family collectively owns 37% of the company stock.^[1] The CEO of Gap, Paul Pressler, who previously ran the Disney theme parks resigned on January 22, 2007. Glenn Murphy was appointed chairman and CEO of the company July 26, 2007.

Contents

History

1969-1980

Brands

Store count

Marketing strategy

Price

Products

Promotion

Place

Control over the word 'Gap'

Labor practices

Product Red support

Celebrities in ad campaigns

Management reshuffle

Board of directors

Leadership

References

External links

History

Originally Founded in 1969 by Donald Fisher, The Gap was to be Mr. Fisher's solution to the problem of a lack of customer service and fashionable styles present in department stores of the era. By creating a speciality shop dedicated to the sale of Levi's blue jeans, Mr. Fisher hoped to capitalize on the 'gap' that had opened in the market.

1969-1980

In 1969, Donald Fisher opened the first ever Gap store in a theatre annex on Ocean Avenue near San Francisco State University, the store's merchandise consisted of Levi's blue jeans and records and tapes, however the audio products were sold for a mere three months before being removed from the store.
By 1970, Gap's sales had reached two million and a second store was opened in San Jose, California. Along with this second store Gap established its first corporate headquarters in Burlingame California, employing only 4 employees. The Gap continued to expand rapidly and by 1972-73 the Gap had grown to over 25 stores and had expanded to areas outside of California and was entering the East coast market with its store in Vorhees, New Jersey. In 1974, the Gap begins to sell private label merchandise in its stores.
1975 saw the creation of the "Pants %ff!" chain of stores which specialized in selling discounted apparel, as well as the acquisition of "You & You" which had formerly been a New England based casual apparel brand.
1976 was a landmark year for the Gap with the company going public in both the New York and Pacific stock exchanges with an initial public offering of 1.2 million shares. With the arrival of '1977' Gap introduces the labels "Fashion Pioneers", "Eaton Hill", and "Foxtails" which are sold in its stores. The company also launches two sub-brands; "Logo", based in California and Missouri, as well as "Brands" based in New York and New Jersey. In this year also, Gap moves its headquarters from Burlingame, to its well known location at 900 Cherry Avenue in San Bruno, California.
1980 saw the incorporation of the "Brands" and "Pants %ff" chains into the Gap's new "Tagg's" chain.

Brands

Banana Republic, formerly a catalog retailer selling safari themed clothing, was purchased by the company in 1983, and eventually was rebranded as an upscale clothing retailer in the late 1980s. Old Navy was launched in 1994, as a value chain with a specialty flair. Forth & Towne, the company's fourth traditional retail concept, was launched on August 24, 2005, in the Palisades Center in West Nyack, New York, featuring apparel targeted toward women 35 and older.^[2] On February 26, 2007, after an 18-month trial period, Forth & Towne was discontinued, and the 19 stores were closed by June of 2007. Gap Inc. is expected to take a $40 million pre-tax expenses associated with the closing.^[3] A fifth brand, the online footwear retailer Piperlime, was created in 2006. ^[4] On March 5, 2007 Gap Inc, hired Egon Zehnder International to coordinate the search for a new chief executive officer to replace Paul Pressler. No deadline was given for the search. In 2004, Gap sold all of its German operations to the Swedish H&M, its main competitor in Europe.

★ Gap

★ Gap Outlet

★ GapKids

★ babyGap

★ GapBody

★ GapMaternity

★ Love Me Gap

★ Love (Gap Accessories)

★ Old Navy

★ Old Navy Outlet(All stores converting to Old Navy on October 2, 2007)

★ Banana Republic

★ Banana Republic Factory Store

★ Forth & Towne (discontinued)

★ Piperlime

★ Gap Warehouse (discontinued)

★ Brands (discontinued)

★ Hemisphere (discontinued)

★ Pants %ff (discontinued)

★ Pottery Barn (sold to Williams-Sonoma)

★ SuperGap (discontinued)

★ Tagg's (discontinued)

★ You & You (discontinued)

Store count

;Gap

★ United States 1,199

★ United Kingdom 120 stores for baby 114 boys girls 120 men's women's

★ Japan 118

★ Canada 94

★ France 25 adult stores 24 kids baby

★ Korea 6

★ Singapore 3

★ India 2

★ Indonesia 2

★ Ireland 1

★ Kuwait 1

★ Pakistan 1

★ Malaysia 1
;Banana Republic

★ U.S. 495

★ Canada 26 (courtesy Buky ohioma)

★ Indonesia 5

★ Korea 5

★ India 2

★ Japan 1

★ Kuwait 1

★ Singapore 1
;Old Navy

★ U.S. 968

★ Canada 63
;Total 3,139

Marketing strategy

The Banana Republic stores try to convey a more sophisticated image for an upscale customer, whereas Gap stores appeal to a broader midrange of customers. The Old Navy chain is designed to appeal to younger generation of customers by emphasizing "fun, fashion, and value" through a store experience that delivers "energy and excitement." Although Gap, along with other retail-store chains, has been criticized for blandness and uniformity in its selling environments, the firm maintains that it tailors its stores "to appeal to unique markets" by developing multiple formats and designs.[1]
In some Major League Baseball parks, a Gap ad appears on outfield wall panels between left/right-center fields and centerfield, which is commonly termed "the gap".

Price

Gap tries to reach the midrange customers, especially the youngsters. Thus, its products are priced above the discount and below the premium brand prices. Its prices are midrange.

Products

When Gap was founded in 1969, it was unique and new. Its target cutomers were younger generations. Gap's hottest seller at the time was its "basic" look, which consisted of its signature blue jeans and white cotton t-shirts. Its founders realized that jeans were becoming popular among the younger generation of customers. Nevertheless, the company recognized that despite its popularity among the youth, there were not enough assortments of jeans in the clothing outlets. Capitilizing on this deficit was merely the next step in expanding. Gap's founders were sure that jeans could be sold through a chain of small stores devoted solely to that product.[2] As this business idea became successful, Gap expanded its line of offering and now Gap offers a range of clothing for men, women, and children. As Gap's business began to boom, it also began to expand. Gap Inc. added two new entities to its company, Banana Republic and Old Navy. All three chains have their own target markets. Banana Republic is known for its casual luxury, with high-quality apparel. Banana Republic tailors its store to appeal to the unique market of pleasing the most fashion conscious consumers. [3] Old Navy has redefined value-priced apparel retailing by making shopping fun and fashion affordable for customers of all ages. Old Navy is focused on the value driven segment of the fashion conscious population.

Promotion

Gap's promotion strategy has been blamed for the company's bust. Due to lack of a clear message, it has been alleged that Gap has lost contact with its core customers[4] which the company is attempting to win back. Gap is the only national retailer to spend more than 2% of its marketing budget for online marketing. [5] Gap promotes its products through gift cards, catalogs, advertising programs on TV channels and magazines. Gap tries to position itself as a stylish casualwear retailer in a fair price. However, its marketing efforts to reach out to upperclass, luxury consumers is blamed for recent problems in the company.[6]
In addition, Gap's garment designs and products varies from North America and Western Europe. Products sold in the United Kingdom and Western Europe are targeted towards a European sense of style, whereas the Gap's North American garments and accessories are designed particularly for North Americans.

Place

Gap's main opportunity to reach its customer is through its stores. Gap operates stores in the United States, Canada, the United Kingdom, France, Ireland, Korea and Japan. The Gap, Inc. also has franchise agreements with unaffiliated franchisees to operate Gap or Gap and Banana Republic stores in Singapore, Malaysia, United Arab Emirates, Korea, Kuwait, Qatar, Bahrain, Oman and Indonesia. As of February 3, 2007, The Gap, Inc. operates a total of 3,131 store locations. [7]

Control over the word 'Gap'

As the company controls the "Gap" trademark, there have been conflicts with others over what constitutes acceptable use of the common English word "Gap" in other products and locations. As a result, the company threatened litigation against Bootleg Gap, a golf course in Kimberley, British Columbia, named after an opening in the nearby Bootleg Mountain.
After three years of expensive negotiations, and without the funds to defend itself in court, the golf course agreed to remove the word "Gap" from its restaurant and 27 holes. It also renamed its whole clothing line "Bootleg Golf." The legal costs from the negotiations delayed landscaping and cart paving projects for the golf course.^[5]

Labor practices

In 2003 The Gap, along with 21 other companies, was involved in a class action lawsuit filed by sweatshop workers in Saipan. The allegations included "off the clock" hours, where workers were not paid for working overtime, unsafe working conditions, and forced abortion policies.^[6] A settlement of 20 million dollars was reached whereby The Gap did not admit liability. ^[7]
In 2006 an online advocacy group, Labour Behind the Label issue a report naming The Gap a top-rated company among 37 UK retailers it evaluated. Another group, Letscleanupfashion.co.uk reported that although not complete the supply chain compliance is the most sophisticated they had seen, and that the company has taken significant steps to resolve the systematic abuses of workers rights.
The Gap actively participates in the "Joint Initiative on Corporate Accountability and Workers Rights" and is independently assessed by the Social Accountability International (SAI) and Verite. GAP encourages its vendors to be SA8000 certified based on standards of International Labour Organisation conventions.
The company also inspects factories for compliance with its internal standards. ^[8] These standards include requiring suppliers not to employ persons under the age of 14, that wage payment is clear, regular, and in accordance with work contracts, and that factories do not permit physical or non-physical abuse.
In 2007 Ethisphere Magazine chose The Gap from among thousands of companies evalued, an industry publication devoted to labor practices, as one of 100 "World’s Most Ethical Companies." ^[9] Gap Inc. was ranked 25th by CRO Magazine, another industry publication that is a successor to Business Ethics magazine, in its “100 Best Corporate Citizens” list in 2007.
Nevertheless, the company draws continued criticism over labor practices. In May 2006, adult and child employees of of Western, a supplier in Jordan, were found to have worked up to 109 hours per week and to have gone six months without being paid. Some employees claimed they had been raped by managers.^[10]

Product Red support

Gap is taking part in the Product Red campaign. As a result, Gap released in spring 2006 a special RED collection, including a t-shirt manufactured in Lesotho from African cotton. The expanded Gap Product Red collection was released October 13, 2006. A percentage of the profits will go to the Global Fund. Gap is also continuing on with Gap Product Red items in the New Year, especially in the lead up to Valentine's Day, using words like Desi(RED). Product Red has now contributed $25 million to the Global Fund.
Other launch partners include American Express, Apple Inc., Converse, Emporio Armani and Motorola.

Celebrities in ad campaigns

Gap is well known for featuring celebrities in its print and television advertisements. They have featured over 300 celebrities of various stature in their campaigns.

Management reshuffle

On January 23 2007, Gap announced that it was replacing CEO Paul Pressler with Robert Fisher, chairman of the board and son of the company's founders, and who would lead Gap on an interim basis as it searched for a new CEO. The board's search committee would be led by Adrian Bellamy, chairman of The Body Shop International and include founder Donald Fisher. The company said it would "focus its efforts on recruiting a chief executive officer who has deep retailing and merchandising experience ideally in apparel, understands the creative process and can effectively execute strategies in large, complex environments while maintaining strong financial discipline." Robert Fisher stressed his personal ties and 30-year professional history in operating roles at the company and as a board member. He started with the company in 1980 as a store manager and worked his way up the company's merchandising ranks and senior executive leadership positions, including president of Banana Republic and the Gap units. He had joined the board in 1990.^[11]
On February 2, 2007, CEO Bob Fisher announced that Marka Hansen, a 20-year veteran of the company who headed the Banana Republic unit, was chosen to lead the The Gap unit, replacing Cynthia Harriss, who had been hired by former CEO Pressler in 2004. Hansen had held a variety of positions with the company, mostly in merchandising. Jack Calhoun, an executive vice president for marketing and merchandising became interim president of the Banana Republic unit.^[12]
In May of 2007 Old Navy laid off approximately 300 managers in the lower volume Old Navy stores to help streamline costs in stores.
On July 26, 2007 Gap announced that Glenn Murphy, previously CEO of Shopper's Drug Mart in Canada, was announced as the new CEO of Gap Inc.

Board of directors

★ Howard P. Behar

★ Adrian D. P. Bellamy (1995)

★ Domenico De Sole

★ Donald G. Fisher (1969)

★ Doris F. Fisher (1969)

★ Robert J. Fisher (1990), ''Chairman'' (2004)

★ Penelope L. Hughes

★ Bob L. Martin

★ Jorge P. Montoya

★ James M. Schneider

★ Mayo A. Shattuck III

★ Kneeland C. Youngblood

Leadership

★ Chairman of the Board of Directors: Robert J. Fisher

★ Chief Executive Officer: Glenn Murphy

★ President, Banana Republic Brand: Jack Cambell, (''interim'')

★ President, Gap Brand: Marka Hansen

★ President, Gap, Inc. Direct: Toby Lenk

★ President, Forth & Towne Brand: Gary P. Muto (''to be discontinued by June 2007'')

★ President, Old Navy Brand: Dawn Robertson

★ President, Europe: Stephen Sunnucks

★ Executive Vice President, Corporate Strategy and Business Development: Art Peck

★ Executive Vice President and Chief Financial Officer: Byron H. Pollitt, Jr.

★ Executive Vice President, Human Resources and Corporate Communications: Eva Sage-Gavin

★ Chief Legal and Administrative Officer: Lauri M. Shanahan

References

1. Gap Explores Alternatives, Including Possible Sale: CNBC's Faber
2. More Information
3. Gap Inc. Announces it will close Forth & Towne Store concept
4. Gap hires Egon Zehnder to find new CEO
5. The Gap Boots Bootleg!
6. http://www.globalexchange.org/campaigns/sweatshops/saipan/abc040100.html
7. http://www.gapinc.com/social_resp/ifpr/faqs_body.shtm#q8
8. GAP Social Responsibility[8]
9. http://www.ethisphere.com/Ethisphere_Magazine_0207/WME-2007-Q2
10. NLCNET [9]
11. "CEO Pressler's out at Gap Inc." MarketWatch
12. "Gap flagship brand to be run by company veteran" MarketWatch

External links

★ Gap

★ Gap, Inc.