Gap, the ailing style label, needs to make a comeback. It’s planning to collaborate with different main manufacturers, together with every little thing from Kanye West’s luxurious style home Yeezy to, properly, one of many largest retailers of all, Walmart.
This week, Gap introduced that it’s collaborating with Walmart to create GapHome, a line of home items that will probably be out there solely via Walmart beginning June 24. The gathering of 400 affordably priced merchandise interprets Gap’s all-American aesthetic into home items in a very literal means, from a $15.88 pillow made out of washed denim to a $64.98 comforter set made of sentimental jersey T-shirt materials.
Over the previous decade, Gap has suffered from an identity crisis. Within the ’90s, the brand was well-known for its khakis, however extra lately, it has been in decline—and the pandemic solely exacerbated the issue. In 2020, internet gross sales dropped by 16% in comparison with the yr earlier than, and its inventory value had misplaced more than half its worth over the earlier 5 years. Gap president and CEO Mark Breitbard’s objective is to affiliate Gap with “fashionable American optimism.” All the things that bears the Gap brand ought to convey a relaxed, easygoing, upbeat model.
Based on Anthony Soohoo, Walmart’s EVP of home, the Walmart venture got here collectively in document time. Walmart agreed to the partnership in December 2020, then Gap designed and manufactured the merchandise in 5 and a half months. Soohoo says the merchandise will first drop on the web site, then Walmart will collect knowledge about what merchandise are standard wherein markets to find out what gadgets to promote in brick-and-mortar shops. “We labored like a startup, turning issues round at unbelievable pace,” says Soohoo. “It’s a testomony to how aligned we have been on this imaginative and prescient.”
Marshal Cohen, the chief retail analyst at NPD Group, thinks this may very well be a mutually helpful partnership. “Anytime you may get one of many largest distributors of retail product with a brand that has the worldwide recognition of the Gap, it’s a highly effective combine,” he says.
GapHome is a part of Gap’s broader technique of licensing its brand identify throughout completely different classes. At an investor assembly final October, Breitbard introduced that Gap had introduced on the licensing company IMG to launch 10 new licensing agreements that may span child gear, eyewear, and home items. Breitbard says that Gap expects these new classes to generate “important” income within the subsequent 5 years, although he declined to be extra particular. IMG helps Gap discover third-party producers who will create these new merchandise. When it got here to home items, Breitbard says that Walmart was a pure retail companion. “We needed to companion with an absolute professional within the home items class that might scale shortly,” he says. “Walmart reaches the complete nation, and it may possibly introduce new prospects to the brand.”
However licensing a brand will be a difficult enterprise. It may create new income streams and put a brand in entrance of latest shoppers, however it may possibly additionally dilute a brand. This occurred with a number of luxurious manufacturers within the early 2000s. Burberry had licensing agreements to create every little thing from Barbie dolls to canine garments to Scotch whiskey. Ultimately Burberry’s CEO mentioned these licenses overexposed and tarnished the brand, so he determined to finish a lot of them.
Gap is in a completely different place as a result of it’s a mass-market brand that’s already broadly accessible to shoppers. And to make sure that every licensing partnership seems like an genuine extension of Gap, the brand will keep concerned with the design course of. “We’re obsessed with the artistic, and we log out on any design,” Breitbard says. “We wish you to have a look at any one in all these merchandise and instantly acknowledge them as a part of the Gap brand.”
However what’s the Gap brand, actually? This June, Gap will drop its first assortment of its YZY line, which it created in collaboration with Kanye West’s streetwear brand, Yeezy. Gap has invested a lot on this 10-year partnership, to the tune of $970 million, in line with Bloomberg’s estimates. And Gap says it hopes this sub-label will generate $1 billion in annual gross sales inside the first 5 years. “The YZY assortment is the factor I get requested about probably the most,” Breitbard says.
However partnering with manufacturers as divergent as Yeezy and Walmart could solely add to shoppers’ confusion about what Gap is. NPD Group’s Cohen thinks that the style world is transferring away from exclusivity, towards a extra democratic strategy, so Gap’s technique would possibly turn into more and more widespread. “We’re in an period of inclusion and variety,” Cohen says. “Manufacturers wish to be ubiquitous to be interesting to all people. You may’t be a specialty brand that appeals to a slender market anymore.”