Gap: decline of a denim dynasty

Gap: decline of a denim dynasty

Reingold J. Fortune, April 2007, Vol. 155 No. 7, Start page: 79, No. of pages: 8

Purpose – To chart the changing fortunes of clothing retailer Gap. Design/methodology/approach – Outlines the history of the business from its foundation in 1969. Describes the business culture and the attitudes of the Fisher family, focusing on Donald Fisher, who started the business in 1969, his wife Doris and their three sons John, Bill and Bob. Notes that the family maintains control of the business, holding 34 percent of Gap’s stock and three out of 12 board seats. Comments on Donald Fisher’s formative influences, his long-standing interests in real estate and art collection and the impact of family control on the development of the business. Explains the circumstances leading up to the dismissal of chief executive Mickey Drexler, who now runs competitor J. Crew and the appointment of Bob Fisher, chairman of the board, as interim chief executive of Gap Inc. Discusses the success of the company’s three brands (Gap, Banana Republic and Old Navy) during the late 1990s and the strategic decisions and competitive pressures that subsequently resulted in falling same-store sales, rising debt and a declining share price. Reviews the initiatives taken at Gap to restore the retailer’s failing fortunes and considers its prospects for future success. Originality/value– An insight into a former iconic brand and a company rated at number 144 in the 2007 Fortune 500.ISSN: 0738-5587Reference: 36AL089

Keywords: Corporate strategy, Corporate strategy, Family firms, Gap Inc, Management effectiveness, Organizational performance, Retailing