This segment from the Omni Talk Retail Fast Five podcast, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, celebrates Gap's 7% comparable sales surge after its viral "Better in Denim" campaign featuring KATSEYE.
Anne praises Richard Dickson's entertainment-first approach for making Gap culturally relevant again with Gen Z and millennials. Chris remains cautiously optimistic, questioning whether flashy marketing alone can drive repeat purchases if the product quality doesn't deliver.
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Transcripts
Speaker A:
And producer, I got a question for you.
Speaker A:
Is your milkshake better than mine?
Speaker A:
Because Gaps comparable sales surged after Milkshake after its Milkshake denim ad with Cat's eye.
Speaker A:
According to CNBC, Gap Inc. Said Thursday its comparable sales rose 5% during the fiscal third quarter, driven by strong revenue at its namesake brand after its viral Better in Denim campaign.
Speaker A:
owth for Gap since its fiscal:
Speaker A:
During the quarter.
Speaker A:
Gaps comparable sales rose a staggering 7%.
Speaker A:
Old Navy's rose 6%.
Speaker A:
Banana?
Speaker A:
Yes, banana was up 4%.
Speaker A:
While athletics comps.
Speaker A:
Yeah, they kind of were still not very good.
Speaker A:
They were still down 11%.
Speaker A:
And has Dixon, Richard Dixon, officially right of the ship at the Gap?
Speaker B:
Well, it's not surprising to me that as a former CEO of an entertainment company that he is making the Gap entertaining again.
Speaker B:
He's got Gen Z talking about it.
Speaker B:
Millennials are talking about it.
Speaker B:
Xers are you Gen Xers are even nostalgic for the Gap of old.
Speaker B:
Anecdotally, my friends and I have been talking about it and passing around the, the new TV spot that they just put out with the choir.
Speaker B:
I think it's great content, it's entertaining.
Speaker B:
But now what will that mean for getting butts in Gap denim?
Speaker B:
That's the question that I have because I think it's piquing a lot of curiosity.
Speaker B:
But and based on this quarter's success, I think it appears that it's piquing interest from people and that's for sure a great start.
Speaker B:
So I think that Richard Dixon should get credited for that.
Speaker B:
But even Dixon himself said, you know, this is a story about consistency, a mix of better product marketing and partnerships to make maintain this growth.
Speaker B:
So I think even Dixon knows, like there's still work to be done before we give him the award for saving the Gap and completely turning it around.
Speaker B:
But I do think that this is a good start.
Speaker B:
You know, first you have to tell people that you exist again and he's doing a good job of that.
Speaker B:
But as a former Gapper, how do you feel about this?
Speaker A:
I think, I think he's definitely doing it seems like he's turning things in the right direction, but I think it's still too early to tell.
Speaker A:
But I like the trend.
Speaker A:
You know, I think I went into the numbers a little bit more on this story.
Speaker A:
You know, I looked at their two year stacks for the last three quarters, Q1, it's plus 5, Q2, plus 4, Q3, plus 6.
Speaker A:
That's A.
Speaker A:
That's pretty good.
Speaker A:
That's pretty good results.
Speaker A:
And if I go back three years, the only quarter that isn't positive is Q2.
Speaker A:
So overall, I think that's pretty good performance.
Speaker A:
The profit line from the quarter worries me a bit.
Speaker A:
They said that's related to tariffs, but I'm curious if that's actually masking anything else.
Speaker A:
You do have to ask that question, I think.
Speaker A:
And the other thing I worry about, and you kind of alluded to this too, is the flashy marketing.
Speaker A:
Marketing is one thing, but you have to get the product right, too.
Speaker A:
And both are, both are hard to do and get right year over year.
Speaker A:
Marketing can spur you to buy once, but can it spur you to buy it that second time?
Speaker A:
So when you get that butt into the denim the first time, do you like it enough to want to come back?
Speaker A:
Because that flashy marketing is not going to get you back the second time.
Speaker B:
So.
Speaker A:
But to me, when I look at the financials, the proof will be in the pudding.
Speaker A:
of:
Speaker A:
Like, if you can get that again, you can show a positive comp in the first quarter, then, yeah, I'm going to give him the official you've turned this company around award and you're doing a great job seal of approval.
Speaker B:
All right, well, hopefully it's a happy holiday for Gap.
Speaker B:
Otherwise, I don't know.
Speaker B:
I don't know what's next.
Speaker B:
I don't know what.
Speaker B:
I don't know who can save you when it comes to these celebrity spots, but, yeah, gotta, gotta have the product down.
