Gap Inc. is trying to sell clothes again without begging customers with discounts.
CEO Richard Dickson, who took over the company in 2023, has made restoring what he calls the brand's 'cultural relevance' his top priority, alongside quality, stores and supply chain execution. He hired designer Zac Posen as creative director of Gap Inc. and chief creative officer of Old Navy, and brought in celebrity partners including Hailey Bieber, who has launched a jeans line with the Gap, plus Malcolm Todd, Inde Navarrette, Victoria Beckham and, at sister brand Old Navy, Cardi B.
The numbers come first. In the first quarter of this year, Gap's comparable sales rose 10%, extending a streak of growth that has now lasted two years. The company's 'Better in Denim' campaign, made with the girl group Katseye, has been viewed 80 million times, and a limited-edition $100 hoodie tied to the group sold briskly.
Still, the turnaround has a long way to go. The Gap brand itself generated $3.5 billion in sales last year, just 23% of the parent company's $15.4 billion in total revenue, while Old Navy accounts for 55%. The flagship brand remains roughly half the size it was at its early-2000s peak.
That peak collapsed for a reason. By the 2010s, sales were plummeting and the company was closing hundreds of stores. Before Dickson, Gap Inc. burned through five CEOs in five years. Dickson says the company had developed a 'positivity bias' — executives, in his words, were not looking at Gap Inc.'s problems squarely in the face. Mark Breitbard, who became CEO of the Gap brand in 2020, says the business had stagnated with dated stores and subpar merchandise, and that discounting had become the primary way to spur sales.
Dickson has a track record with this kind of repair job. Before joining Gap Inc., he spent nearly a decade at Mattel, where he is credited with reviving the Barbie brand and setting the stage for the blockbuster 2023 movie. In 2024 he changed Gap Inc.'s stock ticker from 'GPS' to 'GAP,' a symbolic bet on the founding label's revival.
The remodeled Flatiron store in New York doubles as a case study in the strategy: archival photography by Annie Leibovitz and Bruce Weber, celebrities from Debbie Harry to Willie Nelson to Joan Didion, hung a few steps from oversized images of Bieber. The message is continuity, not reinvention from scratch.
What this amounts to is a company choosing brand equity and pricing discipline over the easy lever of markdowns. Years of discounting trained shoppers to wait for a sale and trained investors to expect thinner margins. Dickson's wager is that paying for cultural relevance — designers, campaigns, celebrity collaborations — protects both the brand and the bottom line better than another round of price cuts ever could.
The market has already voted with two years of comparable-sales growth, and Wall Street will keep grading the bet quarter by quarter. But the underlying lesson for any American retailer is straightforward: a company that stops discounting its way to relevance, and instead invests in the product and the story, gives capital a reason to stick around. Gap's five-CEO stretch in five years shows what happens to a firm that loses sight of that discipline. Its current rebound shows what can happen when a leader restores it.
