Gap’s restructure is a necessary revolution

Gap has overhauled the marketing and design functions in a bid to revive its US business and drive international expansion.

As part of the restructure Gap is creating a “global design centre” in New York, which will be the centre of all Gap’s branding and creative activities, and has appointed the company’s first global chief marketing officer.

Seth Farbman is to take on the newly created global CMO role. Formerly worldwide managing director at Ogilvy & Mather, Farbman has worked with clients including Coca-Cola, UPS, Unilever and Time Warner Cable, and also created sustainability marketing agency OgilvyEarth.

Gap has also appointed Ogilvy & Mather as its lead agency.

The restructure comes just a few months after Gap faced a branding crisis after it attempted to introduce a new logo in the US. Within a week Gap was embroiled in a full-on catastrophe, then reverted back to its original logo, via a misguided crowd sourcing venture which left its reputation bruised.

Gap has also been struggling with declining sales of late and reported a 3% fall in comparable store sales for December 2010, which followed a 2% fall the previous year.

Gap’s management were not untouched by the embarrassment that the logo fiasco brought on its branding teams. At the time, branding experts called for Gap to learn from its mistakes and it appears to have taken those lessons to heart.

While it alone can’t be blamed as the root cause of a restructure of this scale, “Logo-Gate” acted as a catalyst for change at the top.

What it did was highlight that the Gap branding team had no idea what they were dealing with in terms of intellectual property. They didn’t recognise what currency the original Gap logo had with consumers and how strongly they felt about it. Nor did they fully understand how to deal with the dilemma in a multi-channel and vocal media culture.

The new logo set the social media landscape alight and Gap faced a raft of complaints and criticisms labelling the new logo “unsophisticated,” “uncreative” and “devaluing the brand”.

Gap’s bungled attempt to turn the crisis into an experiment in crowd sourcing to reduce the criticism, only served to further enrage consumers and the design community, and further demonstrate that something was inherently not working within Gap’s creative and marketing divisions.

It’s no small coincidence that both Marka Hansen, president of the North American Brand, who was the public face of Gap during the logo fiasco, and Laird + Partners, the agency behind it, have both been let go. Gap is distancing itself from the mistakes it has made and is heralding a new creatively led structure to deliver its much needed growth.

Hansen will be replaced by Art Peck, who previously ran the international franchise and Outlet business.

This is no small change within Gap. Glenn Murphy Gap Inc chairman and CEO says it “indicates the direction the business is going and will allow Gap to compete more effectively and gain market share”.

In his explanation of the restructure Murphy is also is keen to point out that the change within the business is not a knee jerk reaction, but a result of a comprehensive and strategic look at how Gap needs to position for success.

The transformation within Gap’s organisation reveals a new way of thinking about its brand, operations and design.

These are necessary changes for the 40-year old retail brand to reverse its recent sales performance and boost its international expansion.