Since becoming president and chief executive officer of Gap Inc. two months ago, Richard Dickson got near the team and was surprised by what he found.

“It’s the talent and the history that individuals have with this company, and a desire to win. There’s a real sense of ambition for what everybody thinks the corporate must be but isn’t. And there’s confusion internally,” Dickson told WWD. “Why aren’t we as relevant or popular or as big as we should always be? People work very hard. They’re very, very passionate. They consider within the brand. But yet we’re not breaking through.”

With Dickson taking the helm, there’s finally optimism inside financial and fashion circles that higher days could possibly be ahead for the San Francisco-based, $16 billion corporation.

The CEO got an early nod of approval from Wall Street after the corporate reported its third-quarter results on Thursday.

Although net income fell 22.7 percent to $218 million within the quarter, adjusted earnings per share got here in at 59 cents — 39 cents higher than the 20 percent profit analysts projected, in accordance with FactSet. Investors liked what they saw and traded shares of Gap up 10.9 percent to $15.16 in after hours trading.

Sales for the quarter ended Oct. 28 declined 7 percent to $3.8 billion — with an estimated 2 percentage points of that decline attributed to the sale of Gap China. Comparable sales were off 2 perdent, with Old Navy up 1 percent, Gap down 1 percent, Banana Republic off 8 percent and Athleta dropping 19 percent.

Dickson’s experience in merchandise and brand constructing seems to bode well for the business, unlike the 4 previous Gap Inc. CEOs of the past 20 years. Their expertise was largely in non-merchandise areas and for every, the hunt for a turnaround fell short. But on the news last July of Dickson’s appointment, Gap Inc.’s stock perked up 7.7 percent to $9.92. It currently trades around $14.

Before becoming Gap Inc. CEO, Dickson was president and CEO of Mattel and helped strategize the craze across the fiftieth anniversary of Barbie and the blockbuster “Barbie” movie. Prior to that, he was president and CEO of the branded businesses for The Jones Group, where he’s credited with bringing back some relevance back to dated fashion labels. He also cofounded gloss.com, the primary online retailer for high-end cosmetics, and was an executive at Bloomingdale’s. Dickson has been on the Gap board of directors since November 2022.

In an interview at Gap Inc. offices in lower Manhattan, Dickson — wearing a Banana Republic hoodie and jeans — touched on issues at Gap Inc. surrounding pricing, storytelling and the balance of basics and fashion. He spoke of strengths, weaknesses and opportunities on the brands within the Gap Inc. portfolio, which incorporates Gap, Old Navy, Banana Republic and Athleta. He also underscored “doing fewer things higher” and addressed what he feels he brings to the organization.

“If I used to be a physician, I’d say each brand has a unique prescription. But each is in its own type of revitalization,” Dickson said.

Efforts involving margin expansion, SG&A discount, and optimizing and reducing the shop footprint, Dickson said, have created a stronger financial footing for the corporate to now redirect attention to reinvigorating its brands. “We’ll maintain operational and financial rigor. There’s at all times opportunities to be more practical and efficient. And that shall be the value of entry to running our business. But ultimately that builds right into a revitalization story,” Dickson said.

Repairing Gap Brand

A real Gap Inc. turnaround, encompassing consistent quarterly top- and bottom-line gains and pumping latest life into the brands that individuals need to shop more often, poses a monumental task and maybe the trickiest part is getting the Gap brand back heading in the right direction. It’s a matter of sharpening its identity, improving the style, reclaiming dominance in denim and constructing wardrobes around it, and getting people back to the habit of shopping the shop.

From Dickson’s perspective, the mission calls for “reigniting the brand within the context of its cultural conversation and its relevance and returning more to a branded narrative representing fun, fashion, family and value, versus a retail narrative. Over time, Gap has lost its precision around those brand attributes breaking through, and to some extent, it became more of a standard retailer focused on price and promotion, and fewer in regards to the clear and distinct brand positioning that made all of it so great.”

Specifically, “very reliable basics have sustained the business for a long time. What we’d like to do is a greater job creating more of a fashion appeal as well,” Dickson said.

With Gap’s pricing, “We’d like to construct more trust with our consumer.” It’s not a matter of raising or lowering prices, he said. It’s about pricing that’s “clear and precise.…Now we have loads of different price conversations for consumers to excite them, and in all of that communication we get very confusing and ultimately turn out to be a really promotionally driven brand versus [providing] great product at great value.

“The Gap was for all ages, all races, all sexes,” Dickson observed. “It took basics and made them fashionable. It created a retail experience before people were talking about what a retail experience is. It built its brand off music and popular culture. While you really look back at what made Gap so great, Gap was a storytelling brand. It was largely entertainment, and when you take into consideration what which means, you think that popular culture. Gap is a popular culture personified brand. It’s expressed through what we do and what we sell, but it surely means so rather more. Now we have to get our arms around how we start to precise that popular culture narrative in a more meaningful way that celebrates our heritage, and rewrites the longer term.

“When you take a look at the partitions within the hallway here, you see a photograph of Naomi Campbell, and all of the those who represented the Gap. She’s wearing a T-shirt. There’s nothing fascinating there yet it was the personification of our times and it was the language of a popular culture brand. Today we don’t have that as a part of our conversation.”

On Old Navy

Industry analysts have suggested that the turnaround work at Gap Inc. should initially prioritize further streamlining and repairing Old Navy. Considering its size, Old Navy is taken into account the important thing to the general health of the corporation and continuing stock price gains. Old Navy accounted for $8.23 billion in sales, or greater than half of Gap Inc.’s total volume, of $15.6 billion last 12 months. Concerns focus on shrinking sales at Old Navy, fashion misfires, recapturing its quirkiness in a fresh way and stores that appear old.

“We’re going to be working on what we’ll call the ‘store of the longer term’ for Old Navy, after which pressure testing that for all of our brands,” Dickson said. “Each brand may have an absolute revision of their experience. Largely, our retail fleet is in need of revision. Old Navy still has a powerful fleet with opportunities to proceed to expand. Nonetheless, the main target goes to be on ensuring our footprint reflects a greater brand persona and a greater brand experience before we proceed to expand more doors. Collectively now we have got to do fewer things higher. That, to some extent, is a little bit of a mantra, and it applies to many things, including store expansion.”

Dickson acknowledged that Old Navy’s plunge into plus sizes starting in 2021 “took a really big toll” on the business. “It was a strategically well-intended initiative around body diversity and inclusivity. Nevertheless it was also an over-rotation, which led to inventory issues. Marketing messages got a bit confusing. It was a misfire that was type of a shock to the system.”

The corporate got too zealous investing in inventory and marketing the plus sizes and got here up short or late with sizes and styles in demand. The pandemic, supply chain disruptions, late deliveries, temporary closings of Vietnamese factories and Gap Inc. stores created an ideal storm, Dickson said. “The mechanics of the business collapsed,” he said. Old Navy continues to hold a wide selection of sizes, because it should, Dickson noted.

Then again, “For essentially the most part, the standard at Old Navy is above industry standards,” Dickson observed. “We invest rather a lot in our fabrications. Our supply chain is best-in-class. We pay loads of attention to sustainable materials and ethically, our standards are quite high.”

Now we have adjusted our supply chain to permit for what we’ll call ‘chase,’ where now we have the chance to design, develop and execute against trends more proactively.”

Richard Dickson, Gap Inc.

Sharpening the Banana Appeal

With Banana Republic, “We’ve done loads of really good work soul searching the brand’s heritage and attempting to interpret that heritage for today’s consumer,” Dickson said. “The aesthetic now we have begun to roll out, in store design, product and in merchandising is more on par with what we consider the Banana Republic must be. It’s quiet luxury. It’s inexpensive luxury.…Now we have work to do. Now we have work to do in fit. Now we have work to do in pricing, and now we have continued work to do in styling a product. But I do consider we are literally finding a latest chapter of exciting growth for Banana. On the spectrum of ‘good, higher and best’ if Old Navy is nice and Gap is healthier, then Banana can be best, and in that context, I think we’re on our way.”

Last spring, Banana Republic launched into the home-based business with textiles and subsequently added furniture, lighting and decor to the gathering. “It’s aesthetically beautiful,” Dickson said of the house collection. “It’s got great value related to it as well. There’s a reason for it to be. It’s an extension of our brand that has credibility, to exist, but needs further attention and work to be certain that has credibility and connectivity. It needs work. It’s the precise intent. And we’d like to be certain that the pace that we evolve it takes in careful consideration along the way in which. We don’t need to expand too far too fast. Once we work out the mechanics of the way to do it effectively, I think it can be an ideal extension of our brand.”

With a Banana Republic Home pop-up operating in Manhattan’s SoHo neighborhood, Dickson suggested opening additional Banana Republic home stores is a possibility.

Regarding other possible extensions of brands, Dickson said, “Whether that’s beauty, wellness or other categories inside apparel, all of those turn out to be interesting, though they need to relate to the brand positioning. Arguably, Banana is an ideal travel brand. You may see us coming out with an exceptional line of baggage. Because that’s the brand DNA, rather more so than you’d see Athleta coming out with luggage. Now we have to fastidiously curate based on what the brand’s strategy and positioning is and understanding the patron and the experience the patron has with our brands.”

Speed, Agility and Talent

Asked if Gap must be quicker on delivering newness and trends, Dickson said, “Being nimble is a very necessary a part of, frankly, any brand’s objective today. We’d like to maneuver faster on many fronts. We’d like to maneuver with the speed of culture. That’s an art as much as a science.

“Now we have adjusted our supply chain to permit for what we’ll call ‘chase,’ where now we have the chance to design, develop and execute against trends more proactively. There may be an adjustment in our model that may allow for reacting and responding higher than now we have previously.”

Dickson said Gap Inc.’s production cycle can go anywhere from 12 to 18 months. “We’re attempting to get more deliberate around what I call ‘a quick lane’ to our overall product development process,” enabling the retailer to chase and capture trends and have the open-to-buy for that. “We’re being rather more conscious and leaner around our inventory management, to permit the flexibility to chase trends and be more aggressive in regards to the pursuit of the precise product at the precise time for our consumers.” Gap strives to be on trend, not trendy, he stressed. “Fast fashion leans more to modern, which isn’t our space.”

Asked if there may be room to usher in latest talent, Dickson answered, “We’re at all times assessing and evaluating our talent related to what our objectives are. There’s great talent on this organization. With latest leadership, latest expectations, latest vision, loads of the talent goes to step as much as a latest level of creativity. But I do think there’s a chance to recruit and attract latest creative talent.”

There’s been some buzz that Jenna Lyons, former J.Crew executive creative director and president, CEO and cofounder of the LoveSeen beauty brand and reality television personality, could have a spot at Gap Inc. Dickson wouldn’t comment on the speculation, aside from saying, “She’s a unprecedented talent and an excellent friend.”

On Collaborations and Yeezy

“All collaborations and brand extensions should speak to a really clear brand strategy, and a powerful brand position. In order that there’s no reason you’d say ‘Why?’ Or ‘what are they doing with that person? Does that make sense?’” Dickson said.

“A few of the collaborations have been wonderful to spark interest, spark conversation,” Dickson said, citing the recent Shawn Witherspoon and Peter Do partnerships, and after all Gap’s Barbie collaboration. Athleta has orchestrated successful ongoing collaborations with Olympic gold medal winners Allyson Felix and Simone Biles.

He acknowledged Gap could possibly be “rather more impactful and strategic about how we move forward leveraging partnerships. Lots of the programs that were interesting didn’t have legs. Yeezy was great, well intended, arguably one of the exciting collaborations of its time.” Nevertheless it unfortunately failed, he said.

Our brands have to have a much stronger viewpoint.”

Richard Dickson, Gap Inc.

The Vision

Asked if he’s developing a multiyear plan of objectives for Gap Inc., and if he brings a latest vision to the business, Dickson said yes to each, though he expressed the trail ahead in his own way. “It’s best to give it some thought by way of achieving short-, mid- and long-term goals. Within the short term, I’m doing loads of listening and learning and immersing myself within the business. I’m beginning to balance out where I could have immediate impact, and where there’s more thoughtfulness about unlocking the worth of the portfolio.”

The midterm, Dickson said, is when the corporate “reveals a bit more of the vision, the strategic narrative, the structure that we’re going to want to support the strategy, capabilities and unlock the talent within the organization and convey in latest talent.

“Ultimately, the long run, shall be how we grow these very big brands to be more meaningful, each in relevance and revenue.

“All of that is arguably a part of the vision,” Dickson said. “What I actually consider I bring is an unlock of the worth of what these brands already represent, but haven’t been articulated clearly for today’s consumer. That’s really my strength.

“Our brands have to have a much stronger viewpoint. We’d like to do fewer things higher and have more meaning related to our brands, visually and narratively, so that you get the experience you might be searching for.…Right away you’re not seeing anything that pertains to you aside from great things. So we leave it as much as you. Right? Versus showing you.

“The irony behind our businesses is we do $15 billion price of business. So it’s not as if this place doesn’t do business.”

Dickson on Dickson

Asked if he considered himself a storyteller, Dickson replied, “I consider myself a chief editor officer. We’re telling too many stories. We’d like to edit ourselves to inform a more clear and precise story that stays consistent and has a relentless, repetitive narrative to it.” That, he said, is the way you construct trust and consistency with consumers. “We don’t need to have everybody like us, but you will have to have a distinctiveness of view, and never everybody will adore it.” The challenge, Dickson said, “is to make those that love you like you more, and get latest people turn out to be interested. Arguably, now we have been attempting to do too many things for too many individuals.

“Each one in all our brands is a storytelling brand. My role is to create more precision and framework for people to be free to create while maintaining operational and financial rigor.”

It’s not his approach to concentrate on one brand or aspect of the corporate at a time, fix it and move on to the subsequent. “It is a business where you’ll be able to’t fix one thing and assume the whole lot else will find its way. You’ve got to collaborate with all of the moving parts and acknowledge the problems that we’re trying to resolve and do it collectively.…I do consider you will have to give you the option to do multiple things at the identical time, particularly in a business like this. I’ll offer you an example. I could do an exceptional marketing campaign tomorrow. That isn’t a challenge for me or for us. But delivering an exceptional marketing campaign, after which driving traffic right into a place where the product disconnects with the marketing can be a failed attempt. So you have to create the product, the shop experience, the imagery, the sound, the visuals, the narrative, the copy, the creative, the merchandising, and the marketing, in order that the patron experience is exciting and complete. That matters because then you definitely construct trust, and trust is the one biggest attribute I think a brand can have.”