Gap's Revival | Back in Blue | 2

0:08It's fall 2023 at Gap Incorporated San Francisco headquarters. A group of top-gapped executives files into a glass-walled conference room overlooking the Bay Bridge. The view is serene, but the mood is tense. Sales are down, again, across all brands. And the company is still struggling to regain its cultural relevance and keep pace in the digital retail world. They recently hired a new CEO, 52-year-old Richard Dixon. Dixon is tall and slender, with shoulder-length curly brown hair. and he's brought the team in for a wake-up call. He walks to the front of the room and points to a large screen. On the screen is the GAPS website.

0:52This site is a mess. As he talks, Dixon points to the homepage where giant bold banners scream discounts. 50 % off over here, 75 % over there, two times the loyalty points. This doesn't feel like a brand. It feels like a flea market. Dixon shakes his head. The website is all promotions, no identity. It's too overwhelming. Makes everything feel transactional. Look, we're not fostering emotion. Instead, we've lost our brand narrative. We're just shouting sales. One executive nervously tries to interject. But Richard... We've lost the story of our brand and our financial footing at the same time.

1:36Look, this has got to change. Pacing the room, Dixon is met with anxious stares. He tries to calm the team by telling them the story of another brand that was a mess until he took charge. Barbie. Dixon was brought to Mattel to rescue the 11 1⁄2-inch doll. Her sales had been sinking for years and some believed Barbie was dead. But Dixon believed Barbie's story just needed updating. He started her makeover with one simple question. Why does Barbie exist? The answer in 1959 was simple. Ruth Handler created Barbie to give girls a doll that helped them imagine a future for themselves beyond motherhood.

2:20But Dixon had to answer why Barbie existed in the present day. Times had changed since 1959, and it was time for Barbie to change too. Under Dixon's reign, Mattel created new Barbie dolls with new body types, skin tones, and stories. By 2023, Barbie wasn't just a doll. She was a cultural juggernaut who launched a billion-dollar summer blockbuster. Just days after the Barbie movie premiered, Dixon accepted the CEO job at The Gap. And now, he's asking his new team the same question. Why does Gap exist? Does it exist to push endless promotions that train customers to hold out for the next deal, making them wait to click purchase?

3:11Dixon points back to the Gap's website. Gap is a great American brand, but we need to tell a new story, one that's firmly rooted in our past. He puts a new image on the screen, a photo of the first ever Gap store opened in 1969 in San Francisco. The store's name evoked the generation gap between the old and the young, the divide that the Gap hoped to bridge. That was the Gap's purpose. Dixon smiles as he looks at the original Gap store. This image, this is inspiring. The Gap started with an idea and a purpose. And purpose makes brands immortal. The challenge is simple but urgent. Rediscover its purpose and answer the question, why does Gap exist now?

4:02The stakes are huge. If the executives come up with the right answer, they can reignite Gap's brand. But if they don't, Gap's story won't be about immortality. It'll be about extinction.

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6:10From Wondery, I'm David Brown, and this is Business Wars.

6:38In our last episode, Gap boomed in the 1990s and slumped in the 2000s. A string of CEOs tried and failed to revive the company. Inventory piled up. Some even went up in literal flames in a fire that seemed more like a blessing than a tragedy. And even as Gap's old Navy brand took off, the company's overall revenues stagnated. To fix this, Gap launched a turbulent partnership with Kanye West, a deal that crashed and burned. Now, Gap has a new boss, Richard Dixon, the man who brought Barbie back. He's laying the groundwork for a turnaround he hopes will reach beyond spreadsheets and onto store shelves.

7:24To bring Gap back, Dixon will need to take bold swings, like enlisting the help of an A-list designer. But is a high-fashion collaboration the right choice for the mid-priced Gap? There are other problems Gap will face, too, including a global trade war that could blow a hole in its ballast sheet. As Dixon works to fix these issues, he'll insist that Gap isn't just selling clothes. It's selling a personal and adaptable style along with nostalgia. He wants customers to remember the brand they once loved, whether that's the Gap of the 1970s, the 1990s, or even the new millennium. Let me put a finer point on this.

8:08You know, every comeback story has this moment, a place on the tightrope walk between honoring the past and chasing the future. Lean too hard on nostalgia, you feel like a tribute band. Push too far ahead, and you leave all your old fans behind. The best turnarounds make both groups feel seen. It's not easy. But if you can bridge that gap, pun intended, you too have a shot at lasting relevance. There's a fine line between healthy nostalgia and reinventing a brand for the future. The question now, can Gap successfully walk this line? This is Episode 2, Back in Blue.

8:58It's fall 2023 in an auditorium at Gap's headquarters. Richard Dixon bounds onto the stage in front of an audience of Gap employees. Designers, merchandisers, and marketers lean forward, eagerly awaiting Dixon's presentation. But instead of unveiling a flashy new product, Dixon pulls up a screen filled with headlines about Gap Incorporated. Their grim sales at Gap stores have nosedived, falling from$7.3 billion to$3.3 billion in just two decades. Job cuts are part of the story, too. Almost 2 ,000 jobs lost in early 2023 alone. Hundreds of stores have closed, and even Old Navy, once the company's cash cow, is struggling.

9:46One analyst says Gap Incorporated has become a bland retailer. Dixon shakes his head with disappointment and says the analyst isn't wrong. Dixon knows this kind of bad news makes staffers uncomfortable. But in his view, this bad news has become Gap Incorporated's story. And the best way forward, as he explains, is to craft a new narrative. Let's think about this for just a moment. You know, most companies wait until things get better before telling a new story. But stories don't just describe reality. They can help create a new one. A good narrative. That gives employees and customers a reason to believe again.

10:33A good story turns random efforts into a tangible mission. And you know, people will follow a story long before they'll follow a spreadsheet. And Dixon knows it. He reminds the audience that Gap once told its story in ads featuring stars like Lenny Kravitz and Madonna. He says Gap made khakis cool by connecting them to icons who had worn khakis in the past. People like Ernest Hemingway and James Dean. And he says that Gap was once a, quote, pop culture brand. To regain their status, Dixon wants Gap's leaders to get comfortable with having uncomfortable conversations. There are more town halls and other interactions that reinforce the same point.

11:17Gap has to confront reality before it can chart a path forward. If Gap is going to reclaim the cultural relevance it once achieved. It needs more honesty, better sales, and better fabric. And soon, Richard Dixon will find a fabric that's strong enough to stitch together a comeback.

11:45It's late 2023 at Gap headquarters. A design studio hums with life. Sewing machines whirr. designers drape half-finished garments over headless mannequins. The clothes come in creamy whites, deep blacks, and sandy neutrals. And here, Dixon is about to find a soft fabric that he can use to make a bold move. Gap designers show Dixon a line of linen clothes they're hoping will be included in the Gap's spring offerings. There are button-up shirts, wide-legged drawstring pants, crop tops with spaghetti straps, And, yes, even linen khakis. Dixon scans each piece carefully. He studies the silhouettes and feels the fabric running his fingers over the stitching.

12:32He knows what he's looking for. Dixon's family has been making garments for generations. His maternal grandmother was imprisoned at Auschwitz and forced to repair Nazi uniforms. His grandparents escaped the Holocaust and built a fashion business in New York's garment district. There, his grandmother created women's clothing that was sold at Saks. Dixon's parents were also in the clothing business. Dixon's father was chief operating officer at Calvin Klein. His mother was president of a small retailer that, like the Gap, sold t-shirts and other casual basics. A young Dixon worked in the store stockroom.

13:10With this new linen lineup, Dixon sees something that Gap can use to counter critics. In recent years, Gap has been slammed for producing flimsy goods as it tried to catch up to fast fashion brands like Zara. But now, Dixon sees something the brand has sorely lacked in recent years. Quality. The linen products are well made, and the design team believes they can be reproduced affordably, even at Gap's immense scale. Dixon sees something else, too. the chance to make linen the centerpiece of Gap's spring line, much as the Gap made khaki central to its late 90s offerings. Dixon tells his designers to go all out on linen for spring, not just with a handful of pieces, but with an arsenal of the soft, scrunchy fabric.

14:04Now, you know this as well as I do. Big brands often wind up the victim of death by committee, every decision watered down till nothing stands out. Giving designers real freedom? That can feel risky. But you know what's riskier? Blandness. And that's especially true for fashion. One bold product can wake up a whole company and its customers. It tells the world, this is who we are now. And that kind of clarity? It's rare enough to be really exciting. It's a big departure from some of the CEOs who preceded Dixon. They were number crunchers, not creatives. Designers were downplayed and data was celebrated.

14:49As a result, Gap found itself following trends instead of setting them. Dixon intends to reverse this, starting with linen. The problem? Gap has tried and failed to recapture its cool before. But Dixon thinks he has the solution. bring a high-fashion runway star into Gap's mid-priced world.

15:20It's October 2023 in New York. Gap CEO Richard Dixon folds his tall frame into a booth at Balthazar, an always-buzzing brasserie in New York City. He's joined across the table by famed fashion designer Zach Posen. Posen is a 43-year-old wunderkind of American fashion. When he was just 21 years old, he dressed supermodel Naomi Campbell. Later, he gained national attention as a judge on Project Runway. His personality was irresistible, and Posen parlayed his Project Runway stint into designing one-of-a-kind creations for celebrities like Natalie Portman, Rihanna, Sarah Jessica Parker, and Beyoncé.

16:01Now, Dixon wants Pozen to make clothing for the masses. Today, over a plate of Balthazar's legendary fries, he's pitching Pozen on joining Gap as its creative director. But you know, just because they both love the fries doesn't mean there's a match here. You see the problem, right? A high-fashion designer joining a mall brand? Well, think about it this way. One of Posen's most famous designs was a gown for Claire Danes that was made from organza and fiber optics. The dress literally lit up. So what's the Gap supposed to do? Sell glow-in-the-dark clothing? Or maybe Old Navy should ditch its denim for organza?

16:44Fitting Posen into Gap, if, if Posen can even be convinced to join, well, that's going to take some clever tailoring indeed. But Dixon is confident he can make this a seamless fit. He talks about vision, legacy, and most of all, purpose. He says that bringing Gap back will require people like Pozen, people who can leverage their connections to the stylish and famous and convince them, like Sharon Stone in the 1990s, to once again wear Gap on the red carpet. The men don't talk couture, but they do make a connection. Just five minutes into the conversation, while the fries are still steaming hot, Posen makes up his mind.

17:28He's joining the gap. For Dixon, this is a huge win. The new CEO is stitching together a better, bolder gap. But he's working with some very fragile fabric. And just when it looks like the gap's comeback is finally happening, everything will come apart at the seams.

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20:05It's November 2023 in England. Richard Dixon takes the stage at an annual conference sponsored by the new site Business of Fashion. The room is filled with leaders of global fashion houses, and Dixon, fresh off reinventing Barbie and now trying to reboot The Gap, is one of the star attendees. In an onstage interview, he discusses his attempt to turn the brand to relevance and renew its purpose. To do this, he says, he's looking to both the past and the present. Just think about how many gaps we have to bridge. Just today's conversation alone, sustainability, digital dialogue, race, ethnicity, diversity, inclusiveness.

20:45To be able to have a conversation from a brand that was defined around bridging the gap, from a purpose perspective, there could be nothing more inspiring than taking that cue and figuring out how to create that cultural conversation today, using our brands as a platform to actually create a better world. Fixing the bottom line is one thing, but making the world a better place? Well, Dixon's got his work cut out for him. Still, for Dixon, clearing a high bar isn't optional. It's a requirement. Gap has been irrelevant for too long. Only bold moves can bring it back. And one of Gap's first bold moves will come just a few months later with an ad campaign entitled Linen Moves.

21:42It's February 2024, and Gap is launching its spring collection. Remember those linen pieces Dixon admired back in the fall? Well, they're now the centerpiece of the new collection, and Gap is debuting them with its hippest ad in years. The ad, Linen Moves, is a recreation of a viral music video for a song called Back on 74 from the electronic band Jungle. Shot on an undecorated soundstage, the vibe is raw, almost like a rehearsal. But this looseness is the point. Male and female dancers shimmy and shake in an extended single shot that features Tyla, a Grammy-winning South African singer. Every dancer wears Gap linen, but the cuts, colors, and silhouettes of their outfits are all different.

22:29And the campaign works. More than 100 million people view the ad on TikTok, Instagram, and elsewhere online. But even as Gap basks in viral success, Dixon gets a sharp reminder that splashy ads aren't enough. Fixing a brand is about the small stuff, too.

22:53It's March 2024 in San Francisco, and Dixon needs a new hoodie. When he calls a nearby Gap store to see if they have his size in stock, no one answers. He calls another store. An employee answers, but Dixon gets put on hold while the employee checks if the hoodie's available. There's no hold music, either. Just silence. The employee never returns. Dixon hangs up and tries a third location. Finally, success. Well, sort of. The hoodie's in stock, but not in Dixon's size. An irritated Dixon summons the executives in charge of planning and merchandising to his office. He tells them that the Gap is in too tenuous of a financial situation to mess up the small things.

23:48Dixon has been delivering variations on this message for months. When he's not dialing up Gap stores, he's walking through them. And he's found that the stores are playing music that lacks pep, too quiet. But when he asked for changes, the stores swung in the opposite direction and started playing music that was far too loud. When Dixon visited a nearby store, he asked a sales associate if she thought the music was too loud. She did. but she explained she couldn't turn it down because Gap headquarters had ordered the volume set at a specific level. Dixon returned to headquarters and told his executives that this was Gap's problem in miniature.

24:27Decisions made in conference rooms, tying the hands of the people actually running the stores. If Gap's going to recapture its relevance, Dixon explains, it has to empower workers on the front lines and it has to get all the small things right. The message gets through, but whether it can make a big enough impact on Gap's bottom line, well, that's another question. But first, Gap's flashiest executive is about to reclaim the red carpet once again.

25:05It's May 2024 in New York City. Some of the world's biggest celebrities are getting ready to walk the red carpet at the Met Gala an annual event where designers debut their boldest looks. Vogue magazine's cameras are carrying the event live. Moments later, GAP's chief creative director, Zach Posen, arrives alongside Academy Award winner Divine Joy Randolph. Posen has partnered with Randolph and the GAP to create a one-of-a-kind denim look for her to wear this evening. Now, this isn't your average blue jeans outfit. It's a bold blue gown with the silhouette of a 1700s evening dress. There's an off-the-shoulder neckline, a corseted bodice, and a billowing train that takes three assistants to arrange as Randolph poses for photographers.

25:51The dress, as Pozen later explains, contains a lot of symbolism. It plays off the event's theme, Garden of Time, and Gap's San Francisco headquarters. I was inspired by the view of my, I work at Gap Inc. And I was looking at the bay, the changing of the colors, and the blues. and I thought, what fabric we use the most at Gap Inc., and it's denim. So related to water and indigo as a flower. I thought it all worked with the theme, and I thought, you know, I got this beautiful woman coming as my date, I got to celebrate her. The dress is symbolic of something else, too. It marks a dramatic return to high style for the Gap.

26:32Nearly three decades earlier, Sharon Stone wore a simple Gap mock turtleneck to the Oscars. This time, though, the look is pure couture, and Vogue's red carpet co-host, TV personality Lala Anthony, is captivated as she speaks to Randolph and Posen. Zach Posen is here. Devine Joy Randolph is here. We are in the building and stunning. Stunning, stunning, stunning, stunning, stunning, stunning. Please tell me about this look. This is Zach Posen's Gap couture, honey. Denim, denim, denim, snatch, snatch, snatch. Let's go. Hashtag Gap gown. Gap gown. Gap's red carpet moment doesn't stop there. Weeks later, another Oscar winner, Anne Hathaway, appears at a Bulgari event in Rome, wearing a Posen-designed Gap dress.

27:23Her outfit captures the attention of the online entertainment channel Stellar Scene. Anne Hathaway made a jaw-dropping appearance at a Bulgari event in Rome, donning a sexy, off-the-shoulder maxi dress from none other than Gap. Yes, you heard that right. Gap. Unlike Randolph's gown, Hathaway's isn't couture. It's designed to hit the market. Just days after Hathaway wears it in Rome, the dress goes on sale at Gap.com for$158. The limited edition release sells out in just hours. And one TikToker was lucky enough to get her hands on one. But here's my take on it. Beautifully constructed. Zach Posen.