Gap Shares Soar on Celebrity Campaigns and New Styles

Gap Inc

Wall Street is responding positively to Gap Inc.’s (NYSE:GPS) recent strategies.

Shares surged by 15% at 9:34 a.m. in New York on Friday following an impressive earnings report. This boost in performance is attributed to a fashion overhaul led by the new Chief Executive Officer, Richard Dickson. Dickson, known for rejuvenating the Barbie brand for Mattel Inc. (NASDAQ:MAT), joined Gap last August to revitalize the brand, famous for its T-shirts and denim. His strategy includes leveraging celebrity endorsements, collaborating with an independent label, and appointing fashion designer Zac Posen as the creative director for Old Navy.

Actress Da’Vine Joy Randolph showcased a custom Posen denim design at the Met Gala earlier this month. Additionally, when Anne Hathaway donned a white Gap dress at a red carpet event in Rome, preorders for the dress sold out swiftly on gap.com.

There were early signs that this turnaround strategy was effective. In the last quarter of 2023, Gap surprised analysts with its first revenue growth after four consecutive quarters of decline. Up until Thursday’s close, Gap shares had already risen 7.7% for the year, significantly outpacing the 4% increase in the broader S&P MidCap Consumer Discretionary Index.

For clothing retailers, having appealing designs is crucial. Recently, Gap collaborated with the independent fashion label Dôen to release a $128 jean jacket, priced above the usual $69-to-$100 range. The retailer has also launched collections with the skateboarding brand Palace and fashion innovator Dapper Dan.

Consumers can look forward to more of these partnerships. Breitbard mentioned that Gap plans to continue seeking collaborations that will “bring some brand heat and new consumers to the brand.”

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