Richard Dickson, in his first call with analysts as Gap Inc. CEO, offered a romanticized view of the company’s heritage as a game changer that went on to “democratize and define American style.”
He is the fifth person to helm the business since famed CEO Mickey Drexler’s departure in 2002, charged with reversing a sales slump and restoring brand relevance.
The analyst call to discuss Gap Inc.’s second quarter on Thursday – Dickson’s third day on the job – offered little on turnaround specifics.
“In the quarters to come, I’ll share specific priorities and plans,” Dickson said. “What I can tell you today is that I’m intent on reigniting a creative culture at Gap Inc. that is a magnet for the industry’s best talent, including the great creative talent we already have, recommitting each of our brands to a distinctive brand purpose that aligns with customer values and sets them apart.”
Other areas of focus, include getting the company’s brands back into the “cultural conversation,” rethinking merchandising and designs in tune with the consumer.
What isn’t clear is what those tactics look like.
While Dickson is new to the CEO role, he’s been watching the company’s saga as a board member since November 2022.
What’s played out so far is business performance that’s lacked consistency. More recently, the quarter ended July 29 marked the third straight period of slumping sales (down 8 percent to $3.6 billion). Declines were had across Gap, Old Navy, Banana Republic and Athleta.
Culture, Culture, Culture
Broadstrokes, Gap’s challenge today is one of cultural relevancy.
And, Dickson takes over the company at a very different time from when Doris and Don Fisher opened the first Gap store in 1969 selling men’s Levi’s, records and tapes.
“Fast forward to today, the apparel and retail landscape has changed dramatically, evolving at an even quicker pace now,” Dickson said. “It requires great brands run at the speed of culture to maintain relevance. What has not changed is the customer’s desire for fashion they can make their own. We will take that one step further, making what we do, what we stand for, and what we sell, relevant.”
Barbie’s Playbook
What investors and analysts may be hoping for from Dickson is something on the level of what the “Barbie” movie is now doing for Mattel. That is, stoking memes, pop culture conversation and merchandise. Dickson is credited with helping spearhead the Barbie initiative, along with others during his tenure at the El Segundo-based toy company.
“We weren’t connecting to the culture,” Dickson told Bloomberg this year of Barbie’s big issues. “We weren’t even a reflection of what pop culture looked like. Girls looked at us and said, ‘You’re not relevant.’”
Dickson, when asked by an analyst Thursday how more risk-taking can be infused in Gap’s culture, said there are similarities to what he saw at Mattel.
“The parallel construction of where Mattel was and where Gap is, is very familiar,” Dickson said. “Great assets, great talent, a moment where – to some extent – a lot of self-inflicted challenges. Some within our control and some ultimately impacting our business and our industry.”
While Dickson acknowledged change takes time, he said the business will begin testing and learning to see what sticks with shoppers.
“It is a very familiar language [between the two businesses],” he said. “It’s actually a very familiar model and, ultimately, you’ve got to be able to take swings that are calculated, test, roll, learn, scale and accelerate very, very quickly.”
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