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Changes in Old Navy and Gap, Inc.

            Working with H&M, Stefan Larson was Gap's biggest competition and economic downfall. With H&M he released clothing to the United States that was fashionable and had great prices. However, three years ago Gap Inc. hired Mr. Larsson and gave him Old Navy, their most challenging brand. Since day one of his new job, Mr. Larsson brought the low cost brand to a stunning turnaround. Just last year Old Navy had brought in about six billion dollars in sales in the United States and made up forty percent of the company's global revenue. Bringing in almost as much as Gap and Banana Republic combined. Old Navy now becoming Gap's biggest development of growth as other big labels are falling behind.
             However, Old Navy still faces the challenge of keeping such strong growth in a market of cheap fashion that only seems to get cheaper every year. To this Mr. Larsson replies, "I saw an unpolished diamond in Old Navy. Everything starts and ends with product." Mr. Larsson's success with Old Navy started with his level of attention to design, that of which other cheap family-oriented clothing stores had not acted on. Nowadays consumers grow more selective about what they will spend their money on. Consumers who are not some of the wealthiest look for deals more often than higher end brand names. Rather than going to a Ralph Lauren store for clothes, most consumers choose cheap quantity rather than expensive luxury brand name. Even with a stronger job market and lower gas prices, shoppers prefer to invest in long term fundamentals like their cars or homes instead of their wardrobes. All of which is very beneficial to Old Navy, whom has seen sales at established stores jump by eleven percent in the fourth quarter. That being the fastest rate shown by a mass apparel brand in the holiday season.
             Instead of selling commodities to help boost business, Mr. Larsson's new stylish apparel and marketing have improved the brand's name, as well as lowering the price.


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