Gap Inc. Outlines Strategies for its Brands

San Francisco Gap Inc. at its investor meeting Thursday presented an update on the company’s strategies for improving business at its brands, along with an overview of growth initiatives across its online and international businesses. At the meeting, which featured addresses by division heads, executives affirmed plans to eliminate 10% to 15% of Gap's real estate holding by creating smaller stores and closing units over the next three to five years in hopes of increasing productivity.

Executives said they were pleased with the Gap brand’s efforts at strengthening its brand positioning globally and delivering a great product, and that it is now turning its attention to bringing customers back into stores. The brand doesn’t plan to do any more television advertising this year, but will shift to a mix of traditional and non-traditional marketing tactics. Gap’s top priorities for 2009 are driving traffic, executing on its real estate strategy and improving productivity.

With regards to Banana Republic, the company will focus on driving traffic, increasing differentiation, and offering ibrand-righti product. The brand opened its first store in the United Kingdom earlier this year, and the company anticipates further growth opportunities in Europe.

Old Navy has hired a new creative agency, Crispin Porter & Bogusky, to help align its marketing more closely with its redefined target customer: young moms shopping for their families. Top priorities for 2009 are improving the product assortments, driving traffic, delivering on its promise of value, and executing on its new store design.

Gap sees franchise stores overseas as another way to grow. The clothing seller has inked deals for franchises in 21 countries.

The company also views its online business as a strategic growth opportunity. Its e-commerce unit grew to $903 million in sales in 2007 from $595 million in 2005, and should break $1 billion this year.