To steer the struggling retailer back on track, Gap has appointed Richard Dickson, the current President, and Chief Operating Officer of Mattel, as its new CEO. The announcement comes almost a year after the departure of the company’s previous leader. Richard Dickson boasts an impressive 20-year tenure at Mattel, where he played a key role in revitalizing the iconic Barbie brand. His appointment has been met with positive reactions from analysts and investors alike.
The New CEO Richard Dickson
Dickson, who will assume the position on August 22, expressed excitement about the opportunity to work hand-in-hand with Gap’s teams and evolve the brand for a new era. Gap, once a symbol of cool in the retail world, has faced considerable challenges in recent years. The brand’s sales have slumped, losing favor among American shoppers who shifted their preferences to competitors like H&M, Zara, and Target.
Factors Contributing to Gap’s Decline
One of the factors contributing to Gap’s decline is the changing retail landscape, with online shopping and big-box stores siphoning customers away from traditional brick-and-mortar malls. Consequently, the company plans to close 30% of its Gap and Banana Republic stores in North America by next year. In a bid to rejuvenate the flagship brand, Gap tried various strategies, including a partnership with Kanye West for a Yeezy-branded clothing line. However, the collaboration ended prematurely in 2022 due to “substantial noncompliance” and controversial remarks made by the artist.
Neil Saunders, managing director of GlobalData, believes that Dickson’s appointment brings fresh perspectives and extensive expertise in brand marketing and innovation. He points to Dickson’s success in reinventing the Barbie franchise, which has seen a significant resurgence, as evidence of his ability to turn around established brands that have lost momentum.
Impact of the Collaboration
Gap’s recent partnership with Mattel in the apparel sector has been a notable development. This collaboration resulted in the introduction of Barbie-branded clothing, showing a potential synergy between the two companies’ capabilities. Mattel itself has been experiencing success with the “Barbie” movie, distributed by Warner Bros., which grossed a staggering $155 million domestically over its opening weekend, achieving the largest debut for a female director in film history.
Gap faces numerous challenges, and Dickson’s appointment is just one step in the company’s attempt to reclaim its former glory. Previous CEOs, including Mickey Drexler, who led the company in the 1990s, attempted to expand Gap’s offerings beyond jeans and khakis but struggled to maintain the brand’s connection with its core customers. Old Navy and Banana Republic, both Gap subsidiaries, have also been grappling with their own issues, adding to the complexity of Dickson’s task.