Wednesday, September 30, 2009

A Gap in Retailing's Star Power

News that Donald G. Fisher, co-founder with his wife, Doris, of Gap, died on Sunday at age 81 leaves another void in the firmament of retail industry stars.

Too many retailers today are logistics mavens, practitioners of the art of distribution, not merchandising. The Fisher started Gap because they perceived a customer need. In this case, their own. They couldn’t find jeans that fit. Reasoning that others shared their quandary, they opened the first Gap store in San Francisco in 1969. The rest, as the saying goes, is history. Gap went on to become a worldwide icon in the retailing industry. Sales last year exceeded $14.5 billion.

One of Fisher’s best decisions was to hire Millard (Mickey) S. Drexler as president and CEO of the Gap division in 1983. Fisher realized his limitations as an entrepreneur. At the time Gap was languishing, without anything that differentiated it from other stores that sold Levis jeans. Drexler went on to become CEO of the entire company, leading the transformation of Gap into a global private label brand, expanding Banana Republic and launching Old Navy, the fastest retailer to achieve $1 billion in sales.

Fisher’s worst decision was to fire Drexler in 2002 after the latter’s magic touch seemed to elude him for several quarters. Drexler landed at J. Crew. He resurrected that brand into one of retailing’s hottest companies while Gap’s results have continued to be uneven, at best.

I was the prototypical target customer for Gap and Banana Republic, but truth be told I have bought nary an item from either store. Their merchandise just doesn’t fit me well. Interestingly, one of the few purchases I do remember making, at a Gap outlet store, were several pairs of white, black and blue crew socks. I’ve actually done better at Old Navy. I’m sitting at my desk now wearing a pair of Old Navy carpenter jeans.

Not being a slave to retail’s category leaders is nothing new to me. I rarely step inside two of the most ubiquitous chains. Not being a frequent coffee drinker, I never became a devotee of Starbucks (or any of the other chains seeking to decaffeinate Starbucks’ hold on the java drinker). And though I’m a big old movie fan, I have been only a casual customer of Blockbuster.

But not being a solid Gap customer did not prevent me from observing the store for three decades as an editor of a retail business publication. Few companies have had the transformative effect Gap had. And Don Fisher was the man who started it all.