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Non-Tech : The Gap -- Ignore unavailable to you. Want to Upgrade?

To: HRM who wrote (127)	11/6/1999 4:48:00 PM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 189

Old Navy brand losing steam? Gap subsidiary's slower sales may be sign of maturity Victoria Colliver OF THE EXAMINER STAFF Nov. 5, 1999 sfgate.com October retail sales figures show the tide may be turning on Old Navy. For most of the year, Old Navy's phenomenal sales have been boosting sales at San Francisco-based Gap Inc., dragged down by declining numbers at the company's namesake stores. But Old Navy, the company's fast-growing low-price division, on Thursday turned in single-digit same-store sales increases last month - far less than top forecasts of 12 percent. "Old Navy is reaching some level of maturity - in excess of $3 million in revenue and 8 million square feet," said Todd Slater, an analyst who follows the Gap for Lazard, Freres & Co. in New York. "The question on most people's minds is whether Old Navy's (same) store 5 percent (increase) is an aberration. If the Old Navy engine is slowing, then the Gap brand will have to pick up steam sooner rather than later." Same-store sales, or sales at stores open more than a year, rose 1 percent in October for Gap, which operates stores under the Gap, Banana Republic and Old Navy brands. Same-store sales are considered a more accurate snapshot of a retailer's health since they exclude the impact of new stores, such as the recently opened Old Navy flagship store on Fourth and Market streets in The City. Most analysts say it's too early to evaluate whether the slowing of sales at Old Navy is anything other than a blip, an opinion compounded by the fact that October tends to be a slow month for retailers as they head into the holiday season. The reason people care so much is that Gap companies have performed so well in recent years they have become a sort of bellwether for the specialty retail industry. But analysts say their strong performance may be part of their problem. For example, the Old Navy chain posted a 26 percent increase in October 1998. And comparisons will continue to be difficult for the next five months because the 5-year-old division recorded same-store sales increases of about 30 percent for November though March. "When you're working against that sort of comparison, that's pretty difficult," said Alan Mak, an analyst for Argus Research in New York. "Old Navy is still intact. It's just a difficult comparison." Mak said Gap has become a victim of its own success. "After you report a few months and quarters of good sales, you've raised expectations for yourself on the street," he said, referring to Wall Street. "When you can't sustain those numbers, the street punishes you. . . . They can't continue to show these high double-digit gains. That's just the law of numbers." Gap shares fell $1.69 Thursday to $33.81. Some analysts have questioned whether Old Navy has been cannibalizing the Gap by luring shoppers away with lower prices than Gap stores. But most questioned Thursday pointed out the sales at most department stores and specialty retailers, were slow for the first time this year. Federal interest rate hikes have slowed consumer spending, but predictions for the coming holiday season are still solid. In addition, October is traditionally slow because it's after the back-to-school rush but before the Christmas buying period. Argus Research's Mak said Gap stores' sales have been suffering from a lack of fashion-oriented merchandise, something he says might be turning around soon. Slater, of Lazard, Freres & Co., expected Old Navy to show better numbers going into the holiday. "If I were a betting man, I would put my money on an acceleration (of Old Navy sales)," he said. "A brand rarely turns off that quickly."

To: HRM who wrote (127)	11/10/1999 12:31:00 PM
From: Beltropolis Boy	Respond to of 189

fwiw, an article on Gap's advert extraordinaire. note the source. ----- Advertising Creator: Lisa Prisco Vice-president and creative director, Gap Age: Unavailable Birthplace: Unavailable Education: Unavailable Previous Job: Production artist, Gap By Michael Colton Issue Date: November 1999 brillscontent.com Thanks to Lisa Prisco, we know that khakis swing and that everybody wears cords. But we don't know much about Lisa Prisco. Responsible for the Gap's effective series of recent ad campaigns, Prisco is quite shy. She would not pose for a photo nor grant an interview for this story. "We prefer to highlight the work, not the individual," says a company spokeswoman. Building upon the successful khakis campaigns of the last two years—which featured energetic dancers in styles ranging from soul to country to go-go—the current Gap campaign stars motionless young singers modeling vests, corduroys, and leather jackets and pants. The spots are "advertising as an independent form of entertainment," says Randall Rothenberg, an Advertising Age columnist. And they've also sold a lot of clothes: Gap's net income for the six months ending July 31, 1999, was about $400 million, up 46 percent from the same period in 1998. There are other creative geniuses with industrywide influence—such as TBWA/Chiat/Day's Lee Clow, who gave us Apple Computer's "Think different" campaign and the Taco Bell chihuahua. Advertising Age editor Scott Donaton describes Clow as a "mythical figure." But as Donny Deutsch, chairman and CEO of the Deutsch advertising agency, says, the Gap's is "the campaign of the moment." Proving the power of Prisco's creative foresight, virtually everything involved with recent Gap ads has been bestowed with coolness. The 1998 "Khakis Swing" ad is often credited with advancing the swing-dancing craze and promoting a new stop-motion special visual effect, and the unknown singer Macy Gray lent her distinctive voice to a Gap ad nearly a year before being dubbed the Next Big Thing by The New Yorker. Billy Poveda, president of Oil Factory Inc., a production company employed by the Gap, says that the intimate nature of the Gap's in-house ad agency—where Prisco serves only one client—is crucial to her success. "I think the closer [that] artists can get to each other, the better the product will be," says Poveda. "And Lisa's an artist."