Gap Inc., the struggling retailer, has appointed Richard Dickson, a marketing expert known for his work with Barbie, as its new CEO. However, despite Dickson’s success with reviving the Barbie brand, there have been some mixed results in recent years. Sales for Barbie and Mattel have been declining, despite the success of the Barbie movie.

Gap is currently facing numerous challenges, as it had relied on the growth of Athleta and Old Navy to offset weaknesses in Banana Republic and the Gap brand. Unfortunately, both Athleta and Old Navy have also experienced falling sales. As a result, Gap’s market value has dropped by approximately 70% since its peak during the Covid pandemic.

Dickson will have the opportunity to unveil his plans for the company during Gap’s earnings call on Thursday. Although he has only been CEO for a short time, his connection to Gap dates back to November when he joined the board. Analysts are eager to hear how he intends to address the lack of sales growth and demonstrate the brand’s relevance.

Gap has struggled with CEO turnover in recent years, with different executives attempting various strategies that have mostly failed. The company’s attempts at acquiring new brands and launching fresh concepts have been disappointing. Additionally, partnerships with celebrities like Kanye West have not been successful. Gap’s frequent changes in leadership have left the company without a clear direction.

However, investors have shown optimism about Dickson’s appointment. Gap’s shares have been increasing since his hiring was announced last month. Dickson is known for his bold and unconventional marketing strategies, which he successfully employed at Mattel to generate buzz around Barbie. Although the sales gains may not have been sustained, investors hope that Dickson’s innovative approach can bring the necessary change that Gap desperately needs.

One potential obstacle that Dickson may encounter is the Fisher family, the founders of Gap in 1969. William Fisher, a member of the family, sits on Gap’s board, and the family remains one of the company’s largest shareholders. Analysts suggest that their interference may hinder the implementation of Dickson’s strategies.

Despite the challenges, some analysts remain hopeful about Gap’s future under Dickson’s leadership. Goldman Sachs analyst Brooke Roach believes that Dickson’s experience in reinvigorating brands and his background in apparel will be advantageous for Gap. The company has already made progress in streamlining its operations by cutting jobs earlier this year.

Although turnarounds in the retail industry are rare, there have been success stories with brands like Abercrombie & Fitch and Crocs. Another advantage for Gap is that it does not have any bonds maturing until 2029, giving Dickson ample time to execute his plan. While it won’t be an easy task, Gap is not in immediate financial distress, according to Morningstar analyst David Swartz.

The future success of Gap will depend on Dickson’s ability to breathe new life into the brand and deliver sustained growth. Investors are eagerly anticipating his plans for the company and hoping that he can finally lead Gap out of its decades-long slump. Only time will tell if Gap’s latest CEO is ‘Kenough’ to deliver the turnaround that investors are seeking.

Useful links:
1. Gap Inc. About Us
2. Gap Inc. Stock Price