No one wants to shop at Banana Republic anymore

Nobody’s buying at full price.
Nobody’s buying at full price.
Image: AP Photo/Mark Lennihan
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After just a year and a half, Marissa Webb is leaving her position as creative director at Banana Republic. The company broke the news yesterday (Oct. 8). The same day, parent company Gap announced that Banana Republic’s same-store sales were down 10% in September.

No replacement was announced, because there won’t be one. Instead, the product team will take up the slack without a creative director, which suggests Gap may be changing its strategy to fix those disappointing sales. Gap Inc. knows retail has shifted in the US, and cheaper, speedier fast-fashion is winning.

Lately, rather than relying on a strong, singular vision from a design director, Gap wants to know what will sell before producing large batches. It’s the strategy that Gaps’ low-end subsidiary Old Navy has used to increase its sales, and it’s something they’ve begun introducing at Gap as well.

Earlier this year, Gap’s own Rebekka Bay also stepped down as creative director, and Gap’s senior design team collectively took over the job. Gap later announced it would test a fast-fashion model at select stores: introducing small quantities of new styles, and then quickly adding more stock of items that are selling well.

While good design is still a necessity, this new approach depends on two things: a design team that can quickly respond to demand, and quick, cheap manufacturing.

Fast-fashion specializes in both. In just 48 hours, Zara can fill a clothing order at one of its stores in Hong Kong from its headquarters in A Coruña, Spain. That quickness is essential in capitalizing on the brief lifespan of trends, which now move at the speed of social media.

Zara, H&M, and their ilk have dominated the retail market by jumping on these microtrends effectively and imitating the movements of high-end fashion—or sometimes just collaborating with it. Americans have rewarded them. H&M has done so well in the US that it recently opened its largest store ever in New York, literally across the street from another H&M. It’s one of 400 stores the company plans to open this year, primarily in the US and China.

Banana Republic and J.Crew occupy an awkward middle ground on pricing that’s being squeezed in clothing retail. They’re not cheap enough to compete with established fast-fashion chains, such as Zara or newcomers like Primark, the Irish label that just arrived in the US with jeans as cheap as $10. But their clothes aren’t quite premium either, allowing brands such as Everlane, which emphasize quality, to eat into their sales.

Gap’s CEO, Art Peck, told Bloomberg that Banana Republic’s falling sales were due to poor fits in the women’s clothes, similar to when J.Crew blamed its woes one quarter on a missing cardigan. But the problem lies a bit deeper, which Peck admitted later in the interview, noting that the clothing was “not as versatile or flattering as it should be given the price point.”

He’s right.