Ann Matica/Insider
- Gap's new CEO Richard Dickson has a plan to "reinvigorate" its struggling brand.
- He wants to turn Banana Republic into a quiet luxury brand.
- Quiet luxury is a fashion trend centered around high-quality, understated clothing.
Gap's new CEO wants to transform its Banana Republic brand into the next destination for quiet luxury. He'll have his work cut out for him.
Richard Dickson was previously the president and chief operating officer at Mattel and helped revive the Barbie brand. In August, he took over as Gap Inc's chief executive, hoping to accomplish the same goal with its beleaguered brands.
In an earnings call Thursday, the executive laid out his plans to "reinvigorate" Gap, Old Navy, Banana Republic, and Athleta.
"Gap Inc. has weathered a lot of disruption over the last several years," Dickson told investors. Meanwhile, he mentioned the company's brand history and loyal following as strengths to leverage.
"The opportunity is clear, and I have conviction that we can reinvigorate our portfolio of brands while we lead a creative culture that attracts, retains, and develops the best talent in the industry," he said.
Gap Inc. reported net sales of $3.8 billion in the third quarter, down 7% compared to last year. Store sales were down 6% year-over-year. Banana Republic's third-quarter sales of $460 million were down 11% year-over-year, and comparable sales were down 8%.
Dickson's plan to reverse this downward trend includes turning Banana Republic into a quiet luxury brand by elevating its aesthetic and product offerings. After Gap's 1983 acquisition of Banana Republic, the brand lost its way and has struggled ever since with weak assortments and heavy discounts to offload inventory.
"We think Banana Republic has an opportunity to thrive in the quiet luxury space," Dickson said. "This evolution will take time to manifest as we transition away from what was previously a highly promotional and transactional experience."
Quiet luxury is a new term for an old idea — wearing simple, expensive clothes as a status symbol. The hallmarks of this style are simple, understated pieces made from high-quality materials like silk, cashmere, and wool. Quiet luxury clothing and accessories are devoid of logos or prominent branding and typically come in neutral or muted colors. Popular brands include Brunello Cucinelli, Loro Piana, and Hermès.
Characters on "Succession," the hit HBO show about billionaires, brought this trend into broader popularity. Now, there are more than 360 million videos on TikTok with the hashtag #quietluxury explaining how to achieve the look on a budget.