Gap%uFFFDs Many Strategies
The interesting twist of reading financial reports these days is that some stores and brands are reporting their news as “good” if they beat Wall Street estimates on “bad” predictions (because it’s not as bad as they thought it would be), rather than just saying it like it is. Case in point: Gap, Inc. reported Thursday, May 21, that its 1st quarter profits fell 14%, but it did beat Wall Street estimates. So, we’re supposed to take this as a good thing, sort of. Gap revenue dropped from $3.38 billion to $3.13 billion, with same store sales falling 8%.


Gap, which also owns Banana Republic and Old Navy, will be trying several new strategies with all of their stores. First with Old Navy, they’re continuing their strategy to push forward to reach moms who spend carefully, and are changing the fashion line-up to better match such a demographic. For the Gap, they’re pushing a new ecommerce strategy, which we think is smart and absolutely necessary for all retailers today, and moving into expanding their international reach. Like many other retailers, more stores overseas tend to be the best plan when you’re saturated on the home front. They also announced they’re going to revitalize their khaki campaign. While the whole “khaki’s is the new jeans” concept in 1998 did not really work the first time around, we all loved those jazzy, swing dance commercials, so maybe it’s time to bring out the prison uniform beige pant-look again and see what happens.

Aeropostale Beats Expectations
Aeropostale, meanwhile, had 1st quarter profits jump 81% ahead of Wall Street analysts mainly because they offered up super-low prices, especially in denim and T-shirts. As a youth market retailer of course this move made sense (and it is a strategy that competitor Abercrombie & Fitch did not do, as we noted last week). Since their plan is working, they announced they’re going to keep it going by focusing on low-cost, recession value margins. Overall, their profits as of May 2 increased from $17.5 million to $31.7 million, however they’ve also closed their Jimmy Z stores. Same-store sales were up 11% for this quarter.

Fashion’s Night Out

In other retailer news, the CDFA, partnering with American Vogue and 100 top retailers in 12 different global cities are hosting a “Fashion’s Night Out” event to coincide with New York’s Fashion Week September 10th in an attempt to attract shoppers to a newer, more hip, event-like atmosphere of revitalized stores and malls (read also our story on the bankruptcy of General Growth Properties). The idea sounds like one, huge collaboration/pop-up shop “Fashion AID” to make the shopping experience, well, more like an experience than a bore to go buy clothing you don’t really need at prices you can no longer afford.

Fashion’s Night Out is already getting major designer support including Oscar de la Renta, Tommy Hilfiger, Zac Posen, and even New York City Mayor Michael Bloomberg, as reported on WWD. Supposedly the concept is catching buzz globally, thanks to American Vogue, and editor Anna Wintour, who is pushing other major “Vogue” magazine distribution cities to do the same.

Fashion Week Video Game
A potential real hit on the horizon is the 505 Games and IMG’s announcement May 21st of their new video game called Fashion Week. The idea is to provide a multi-platform game including iPhone whereby gamers and fans of fashion can pretend they’re participating live during Fashion Week (this is intended to be a fashion week anywhere, but the theme seems NYC-centric), complete with industry insiders, designers, models, celebrities, and runways. The game is scheduled to hit markets in 2010 (in-depth story coming shortly).

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