Gap Rethinks Marketing Plan

San Francisco A disappointing fourth quarter is prompting Gap Inc. to abandon its spring TV campaign and curb other marketing plans, according to an article in Brandweek.

Gap reported sales of $4.67 billion for its fiscal fourth quarter, ending Feb. 2, down 5% compared to the same timeframe last year. By trimming some marketing programs, the retailer hopes to ride out a “volatile economic environment,” CEO Glenn Murphy, said in a conference call to analysts on Feb. 28.

The retailer already cut its ad spend in half in 2007, spending an estimated $55 million, down from $117 million in 2006, according to Nielsen Monitor-Plus. Now Gap is re-evaluating marketing plans for the second half of 2008.

“We’re very aware of the environment we’re operating in 2008, but not all of our marketing money is being revisited," Murphy said. "Some portion is being re-looked at to make sure it’s being used appropriately, given that consumer sentiment is where it is, and that particularly applies at Old Navy.”

That said, marketing plans for Old Navy and Banana Republic will currently remain similar to last year. However, the retailer will forgo a spring TV campaign for its Gap brand, said the company’s executive VP and CFO Sabrina Simmons.

Same-store sales for both Old Navy and Gap decreased by 5% to $1.8 billion and $1.3 billion, respectively, while Banana Republic posted a 2% gain to $764 million.

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