The Gap and Zara | A tale of two brands

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So it’s official. As of the first quarter of 2008, Inditex, the phenomenally successful Spanish fast-fashion conglomerate and parent company of Zara, has officially overtaken The Gap to become the world’s biggest fashion retailer. In the meantime, the once venerable Gap is still tweaking its product around the edges, struggling to find a formula that works.

Zara stores have been popping up on high streets and in malls around the world, registering  a whopping €6.3b in sales in 2007, making it larger than Louis Vuitton. Perhaps more surprisingly, the performance of Inditex’s smaller brands like Bershka and Massimo Dutti has also been strong, registering revenues of €925m and €696m respectively, in 2007, making Bershka’s business larger than that of Christian Dior Couture and Massimo Dutti’s greater than that of Bottega Veneta.

Over at The Gap, however, the news is completely different. Only Banana Republic continues to perform well, while the flagship Gap brand, and its cheaper offshoot Old Navy, continue to struggle. Over the weekend, London’s Sunday Telegraph revealed that the Gap planned to dismantle its London design team in favour of a New York-based team headed up by Patrick Robinson, who was tapped to design The Gap’s North American collections last year.

Bill Chandler, Vice President, Corporate Communications told The Telegraph “As the North American product has been accepted more widely in the past year and a half it makes business sense and allows us to be more cost-effective while giving the styling that our customers desire. There will be a handful of designers in New York focused on making adjustments to our North American designs for our European customers.”

While the argument that having one design team is more efficient for the global business holds some water, it is still a puzzling move. The one bright spot for The Gap in recent seasons has been the strength of its European collections, designed by a team based in London. One of the worst-kept secrets in the Industry was that the European collections were designed with input from influential fashion insiders, including Phoebe Philo and Balenciaga’s Marie-Anne Sauve.

What were the results of this injection of Euro-cool? During recent fashion weeks, fashionistas from the USA flocked to Zara stores while in Europe to snap up the stylish clothes on offer — something that has been missing from The Gap for years now. The Gap store on London’s Oxford Street was positively buzzing on a recent visit. Just when they were getting things right in Europe, Gap’s management has pulled the plug.

Only time will tell if Robinson can bring the same relaxed sense of cool to his collections, and whether collections designed in New York, and tweaked for European tastes, will have the same in-store impact. I think The Gap may have been penny-wise, pound-foolish with regards to this decision, in an economic climate where only the best product, offering the best value, will continue to sell well.

So for now, my money’s still on Zara. But, with the future of fast-fashion now also in question, as consumers are starting to think about the impact of disposable fashion such as that produced by Zara, the next disruptive model may very well come from a brand that addresses this concern, as well as the ever-evolving expectations of the global fashion customer.

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6 comments

  1. Zara beats Gap hands down. GAP still can’t get me in the store. They can’t just keep telling me they are returning to their cool casual roots. I need to see it, and I’m not seeing it anywhere.

    Ads from Philadelphia, PA, United States
  2. I think Gap’s reputation is so tarnished that it’s going to take a miracle to lure people back to its stores. Especially in the US where J.Crew beats out Banana Republic in style, eventhough they’re a bit pricier, I think it’s the better brand (not to mention that J.Crew’s CEO, Millard Drexler, was the one who put Gap on the map in the first place).

    Dahlia from Montreal, QC, Canada
  3. I differ from the other commenters because, although I haven’t set foot in a Gap for five or six years, if I had to spend money in one store or the other I would choose Gap. The last time I went into a Zara, I was disappointed by how shoddy everything looked, the bags and shoes especially (I also happen to dislike their dominant palette, grey and tan). Gap is bland to be sure, but their collaboration with Pierre Hardy earlier this year was quite something. Unfortunately, I agree that closing the London office was a bad move. Really, they should have moved the entire design team to London or Paris, because what the store really needs now is less American casual and more French chic. Also, I hate to admit ignorance but who is Marie-Anne Sauve?

    Anjo from Stanford, CA, United States
  4. I just can’t buy anything from The Gap. Ive been to 3 dfferent branches in 2 different countries. Just really bland and stuck in the 90’s.

    chris from Quezon City, Quezon, Philippines
  5. ANJO, In one of your earlier comments you mentioned that you have seen a documentary on Zara. Please direct me towards it. Thanks.

    Robin from Taipei, T'ai-pei, Taiwan
  6. Am still in shop as to Zara”s growth over the past year,As a designer and personal shopper I spend most of the shopping money in Zara shops,what I want to know is how theydo it,because I want my brand to model after Zara in Africa