Gap Inc. CEO explains strategy to balance revenue & relevance

Gap Inc. (GAP) CEO Richard Dickson sits down with Yahoo Finance Executive Editor Brian Sozzi at the Cannes Lions International Festival of Creativity to discuss the US-based apparel retailer's branding journey, customer strategy, and more. Click here to watch more of Yahoo Finance's coverage from the Cannes Lions International Festival of Creativity. Video Transcript 00:00 Brian Sozzi So let's pick apart brand by brand, the Gap story. What is the Gap story that you're telling this audience? 00:07 Richard Dickson So Gap, as you know, is a 55-year-old brand that really sort of its claim to fame was the personification of American classics, basics that personified style, and it was really about how you wore it, not how we told you to wear it.

And the marketing campaigns that we built over time were epic, leveraging music and fashion and big ideas into real marketing and media machines that were arguably what we call fashiontainment. Now along the way, as you also know, Gap lost its way from a storyteller to become a retailer that sold stuff. And we sold a lot of stuff, which we had revenue, but we were missing relevance. And so part of the narrative that we've been working on now is how do you combine relevance to drive revenue? And that's being better storytellers. So we've leveraged, we've gone back to our history to be inspired by it, but essentially create a new playbook for today.

Leveraging music, going back to fashiontainment, recognizing that our media mix and up model needs to be where our consumers are, digital, social, influencer, leveraging all of those big ideas whether it's the Get Loose campaign with Troye Sivan, or linen as a fabric that we want to be a leader for, or the various different campaigns we've done recently with Parker Posey that put us right on top of the cultural conversation, that's where Gap should be, that's where we are now and that's where we're going to accelerate going forward. 02:04 Brian Sozzi So when I was way back when, when I was an analyst covering Gap, and I wrote some tough stuff, but nonetheless, I I always asked, is Gap going to show up in a big way on the holiday earnings calls? It was a constant question. So for how this holiday season, are you ready to make that big marketing commitment to plaster Gap all over TV? 02:38 Richard Dickson Listen, TV is one area that we will of course, we'll have presence in. But to be relevant today, you need to be everywhere your consumer is. And they're everywhere.

It's digital platforms, it's social, it's influencer. It includes some linear. There's a lot of different ways that our brands and brands today need to have consumer conversations. And what I can assure you is that Gap will be part of the cultural and consumer conversation, not only for holiday, but every day leading up to holiday. It is a 24/7 role to be part of consumers' lives.

And I think today, you see a much different Gap than you saw just a year ago, and a year from now, you'll see a much different Gap than you see just now. 03:29 Brian Sozzi Are you telling all these folks here that your stock ticker changed? 03:35 Richard Dickson First off, I mean, come on, we're Gap. I thought you were at the New York Stock Exchange. 03:42 Brian Sozzi Yes, you were GPS. But you were a GPS navigation system for ever.

03:47 Richard Dickson That's right. And and arguably, we were sort of missing the navigation and the destination is Gap. Yeah. And so it was an easy win for us, certainly, your marketing, your ticker everywhere you go. 04:01 Brian Sozzi Uh so Old Navy, I, this has to be a prime time in the world and the economy to lean into a value message.

Is this, is that correct? Is that what we should expect to see from Old Navy over the next few months? 04:16 Richard Dickson 100%. I mean, Old Navy is the number one specialty apparel value chain in the country in the US. Uh we do have global recognition, but truly an American iconic style, value family proposition in the space. We have leadership market share positions across most categories in the apparel industry. Uh as you know, we've been going after the active space pretty aggressively.

We're now the number five active brand uh in the active catego- 04:49 Brian Sozzi Old Navy? 04:50 Richard Dickson Old Navy. That's right. Climbing the ranks, consistent quarterly uh comp deliverables, nine consecutive quarters of market share growth. I mean, we're posting more and more excitement, not only in the metrics that matter, but also recognizing that every cohort, lower, middle, and income grew in the last quarter, which really suggests that not only is our product resonating with our core value proposition, but we're starting to attract new customers to the brand, different generations to the brand to consider the style at value proposition. And we believe again, we're just getting started.

05:31 Brian Sozzi Um, Banana Republic still on the recovery? 05:37 Richard Dickson I would say it's more than on the recovery. I think that we're in a place right now where if you go into our stores, which I know Brian, you have- 05:44 Brian Sozzi Banana Republic shirt. 05:45 Richard Dickson I which looks fantastic, by the way. Appreciate it. Thank you.

Yep. We have been working really hard at getting our product narrative back on track. Uh a season after season now, you start to see the brand really come through in design codes, in fit, in function, in feature, and in value. We are a premium lifestyle brand, but we're right at the cusp of that real affordable luxury, if you will. Amazing cashmeres, suedes, leathers, fine details at prices that are truly extraordinary.

All told within the brand storytelling DNA, which is really about the modern explorer. So when you go into our stores today, you're going to start to see a very different Banana. In some cases, we've remodeled our stores. 06:31 Brian Sozzi So I'm a modern explorer? 06:33 Richard Dickson You you are. Look at where you are.

I mean, you're out there, right? And you need to be recognized as what. Yeah. 06:38 Brian Sozzi I appreciate it. Well, you know why this shirt fits so well, it's because I have been working out like hardcore, but you got the fit right finally. We did.

And that that is that the biggest problem that you fixed at Gap, Old Navy? I've told you this before. The mediums used to fit like larges. 07:03 Richard Dickson Yeah. No, it was a big issue and fit is a really important part of a when you're an apparel company. It's the arguably, it's it's the gatekeeper.

It builds trust, it builds loyalty, it builds, it builds reliability. And we've been working across our brands to get that fit right. Uh and as you see, it's working. And so the more that we build that trust and loyalty, and maintain that value proposition with great style, these are brands that are iconic and have much more legroom to grow. Related Videos 09:29 How AEW has retained its cable audience during Max partnership Yahoo Finance Video • yesterday 05:30 Marriott CEO talks summer travel demand, AI implementation Yahoo Finance Video • yesterday 17:22 X CEO Linda Yaccarino on advertisers, Elon Musk, TikTok ban Yahoo Finance Video • yesterday 12:31 How TIME is harnessing AI amid 'complicated time in media' Yahoo Finance Video • 2 days ago View Comments